Many policyholders are concerned that when they replace their old car with latest and more expensive one their insurance premiums would increase a lot. Your insurance premium doesn’t always go up when you switch an older automobile on your policy with a latest model one. Also, the premium difference between a new and used car insurance may be negligible to worry about.
There are many questions from policyholders and vehicle owners on this subject. This post will try to find answers to some of the questions below.
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 insurance 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 car insurance premium increase on top.
So, is it cheaper to insure an older car? In general, you can get cheap insurance for older cars and it may be cheaper than insuring younger vehicles. However, that would very much depend on make and model as well as age. If you own an older automobile that is easy to steal and hard to find parts for you may find that insuring it isn’t really cheap.
Is insurance higher on newer cars, then? Switching your trusty minivan with a plush convertible wouldn’t help your case and you will no doubt see some rises in costs of insuring it. 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 your curiosity.
Another example, if you did not have collision and comprehensive coverage on your old car you probably see some premium increase as you would most likely include these covers for a much more valuable automobile.
As a general rule, buying plush cars will increase your rates a bit but a full blown sports car can actually double your auto insurance costs.
Buying your next auto with a loan may increase your premium costs a bit more because lien-holders 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 auto insurance deductibles that could have helped you reduce costs. You would also want gap insurance coverage to make sure you can pay the outstanding loan if your 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 Car?
Complex nature of auto insurance premium calculations makes it impossible to say things like it is cheaper to insure older automobiles. 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 your insurance for a new car can be more economical than your older 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 types for your old vehicle and if it was rating poorly on safety and auto thefts. Your new automobile will be insured at a higher value though.
Nonetheless, automobile insurance discounts you get because of increased safety and security features in new cars can negate any increases due to higher vehicle value. Effects of safety and security features on vehicle insurance is underrated by most people. They do affect rates more than the value of the insured vehicle.
Simple safety features like better seat belts and air bags save lives everyday. They also reduce injuries that cost millions to carriers every year in claims. Insurers 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 many news about expensive cars being stolen? It is simple because their security features make it impossible to steal them. That is why it is possible to cover them at a reasonable premium as long as the owner and insured drivers have good driving records.
Also, type of vehicles is important. If you are selling your sports car and buying a family sedan you may actually see drops on your 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 Car?
If you’re planning on buying a more expensive vehicle, you may be worried that your already high insurance premium will only end up going up even higher as a result of your purchase. This can be especially important to you if you’re on a tight budget and you find it difficult to afford your current premium. The fear of buying a new car and dealing with the higher insurance rate on it may 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 insurance quotes for the vehicle you are considering buying. There is no reason why you cannot do a full blown quotes comparison online for the vehicle you are planning on buying, as long as you have its particulars.