New Versus Used Car Insurance Rates
Did you know that the type of car you have will directly affect your insurance rates? If you’re shopping for a new or new-to-you vehicle, it’s important to consider how the type of car you purchase will influence the price you pay in premiums.
What’s the difference between insuring a new or used car?
While every policy and situation is unique, it’s generally accepted that insuring a used car is cheaper than insuring a new car. Older cars generally cost less to replace than new cars, and it’s usually cheaper to get parts to repair an older car. With that being said, because new cars today often come with a host of safety features and have better crash ratings, depending on the car’s make and model and your location, it may be less expensive to insure a new car vs. a used car.
What are the coverage requirements?
The types of coverage you’re required to carry for your vehicle will also directly affect your premium rates. If you’re financing a new or used car or leasing a new car, your lender will likely require that you carry comprehensive and collision coverage on your vehicle as well as liability coverage. This “full coverage” will help protect the lender from significant financial losses if the car is totaled while still being financed. Carrying this type of insurance tends to result in higher premiums.
Comparatively, if you do not have an auto loan, you’re generally only required to carry the state’s minimum mandatory auto insurance. But it’s recommended that you maintain coverage beyond the minimum amounts needed for your own protection.
There is a significant price difference between the two scenarios.
How can I save on auto insurance?
If you’re trying to find ways to save on auto insurance, keep the following in mind:
Your driving record. Studies indicate that drivers with past claims are more likely to have future claims. Drivers with moving violations, accidents or claims in the past three years will usually pay a higher price for their automobile insurance than those insuring the same vehicle but with no reported losses.
The type of vehicle you drive. Both size and performance impact premium costs. Larger cars tend to be less expensive to insure than smaller cars because they typically suffer less damage in an accident. High-performance vehicles, such as sports cars, tend to be more costly to insure since they are statistically driven more aggressively. As a result, they tend to be involved in accidents more frequently.
The value of the vehicle. As a rule of thumb, the more expensive the car, the more it will cost to insure.
Vehicle features. You can earn premium discounts based on the vehicle’s safety features, such as anti-lock brakes, airbags and anti-theft devices.
Your choice of deductible. The higher your deductible, the lower your premium.
For other ways to save, including potential discounts you may be eligible to receive, give the team at InsurePro LLC a call today.
You may also be interested in…