Is Insurance Cheaper for Newer or Older cars?

Many policyholders are concerned that premiums would increase a lot when they replace an old clunker with a latest and more expensive car. This switch doesn’t always result in increased rates because there are mitigating factors. Also, the cost difference between new and used auto insurance may be negligible to worry about, especially if they are the same make and model.

This post will look at and try to give examples as to how value and latest security features play in determining which age vehicle would be more economical to arrange a policy for. Also, it is worth keeping in mind that they may actually need different level of coverage and that can become an influential factor.

When Does Insurance Go up with a Newer Car?

Buying an automobile comes with additional financial responsibilities. You may have to raid your savings or take an auto loan to purchase it. Then, there are other costs like premium and fuel consumption. You shouldn’t forget about value depreciation as well since it will be losing thousands of dollars on its value every year. Last thing you want is rate increase on top.

In general, you can get cheaper insurance for older automobiles than younger ones. However, that would very much depend on make and model as well as age. You may find that it isn’t really cheap if you own an older automobile that is easy to steal and hard to find parts.

Switching a trusty minivan with a plush convertible wouldn’t help your case and you will no doubt see some rises in costs. Without knowing what sort of an auto you had and what is the one you just bought, it is difficult to give a specific answer that will satisfy the curiosity.

Another example, if you did not have collision and comprehensive coverage on the old car you probably see some premium increase as you would most likely include these for a much more valuable automobile.

As a general rule, buying plush cars will increase rates a bit but a full blown sports car can actually double vehicle insurance price. 

Buying the next auto with a loan may increase costs a bit more because lenders will impose certain conditions. They will definitely want you to include Collision and Comprehensive coverage. You may not have a problem with it since most people buy them anyway. However, they may not allow you to increase deductibles that could have helped you reduce costs. You would also want GAP to make sure you can pay the outstanding loan if the auto is totalled. Quite a few people need auto loans to get the latest model vehicle and this is one point to keep in mind.

When Is It Cheaper to Insure a New Auto?

Complex nature of quote calculations makes it harder to give a conclusive answer. Companies pay more attention to things like how good a vehicle is in protecting its driver and passengers from injuries. There are several other reasons why it can be more economical than the aged one.

You may be able to find cheap insurance for new cars depending on make, model and safety features. You may not need to pay additional premium if you had the similar coverage for the last one and if it was rating poorly on safety and auto thefts. A latest model will have a higher price tag though.

It is highly likely that discounts you get because of better safety and security features in new cars can negate any increase due to its higher value. Most people may not realize but they do affect rates more than open market value. So, replacing an older car with the same make and model but latest addition may not make a huge difference in insurance premiums either way because of the just mentioned give and take. 

Simple safety updates like better seat belts and air bags save lives everyday. They also reduce injuries that cost millions to carriers every year in claims. Underwriters carefully follow the effects of these modern safety and crash avoidance features on preventing injuries to motorists. When they find a vehicle to be good at preventing injuries they can slash the premiums to surprisingly low levels.

Security features are not ignorable too. Why do you think you don’t see news about expensive cars being stolen? It is simple because they are harder to steal due to preventative measures installed. That is why it is possible to cover them at a reasonable premium as long as the owner and listed drivers have good records.

Also, type of vehicles is important. If you are selling a sports car and buying a family sedan you may actually see drops on rates. The best way is to check before making the decision of switching cars. This way, you will be prepared for any increase.

How to Check How Much Is to Insure a New Automobile?

If you’re planning on buying a more expensive vehicle, you may be worried that already high rates will only end up going up even higher as a result of it. This can be especially important if you’re on a tight budget and you can hardly afford the current prices. The fear of increasing costs to an unaffordable level might make you decide against it altogether. And you actually need a better vehicle because the one you’re currently driving is old and always in need of repairs.

So, forget the myths and check insurance rating of the automobile you like. Usually, it is listed under vehicle’s particulars. Furthermore, you can get yourself some quotes for a vehicle you like. There is no reason why you cannot do full-blown quotes comparison online for the vehicle you are planning on buying, as long as you have its particulars.

Share on Pinterest
There are no images.