Among the many factors taken into consideration when formulating an auto insurance policy, the age of a vehicle is one of them. Usually, insurance rates for an old vehicle are lower when compared with newer ones because they are less expensive. That being said, there are still other factors that can cause the cost of insurance to vary significantly.
In this blog, we answer the question: Is it cheaper to insure a new or an old car?
The Value of the Vehicle
Depreciation causes the value of any vehicle to reduce over time, which is why the insurance rates are comparatively cheaper. The lower value results in reduced liability for the insurer since the cost of the car’s repair is roughly the same amount. Since the insurance company is only liable to cover the replacement cost, the replacement value is exceeded by the repair costs.
Older Vehicles Do Not Require Comprehensive and Collision Coverage
For a simple reason: in case of a collision, it is not worth spending a considerable sum on repairing an older vehicle. Removing comprehensive and collision coverage from the insurance policy can half the cost of the monthly premium.
High Cost of Repairing Newer Vehicles
Newer vehicles have a higher value than older ones. This leads to higher costs of repairs for the insurance company.
That being said…
Safety Features Lead to Lower Rates
There’s good news though! Because newer vehicles come equipped with all kinds of safety features—anti-lock braking system (ABS),adaptive headlights, a blind-spot detection system, A lane-departure warning system, automatic seat belts,anti-theft systems,driver-side and passenger-side airbags, backup cameras—that lower the risks of accidents significantly, the cost of insurance may be lower.
Older, Used Cars are Dependable
Buying a newer vehicle provides a high level of comfort. You know that it hasn’t undergone major repairs and comes with warranty coverage. However, the standard of car manufacturing has been raised considerably since the past few decades. Used vehicles are sturdier, reliable, can go on for tens of thousands of miles before requiring costly repairs and are even sold by dealerships before undergoing careful inspection.
Financially speaking, it makes much more sense to purchase a used car which has been maintained in good condition by the previous owner (which would include tire rotations, routine break checks, oil change, and car wash) considering that a brand-new car loses nearly 20% of its value when it first hits the road and 30% by the end of the first year.
The older vehicle won’t only cost you less but will have lower insurance costs as well.
Finally, there are many other reasons apart from the price which determines the choice of car purchase such as the driver’s age, marital status, gender etc. Whichever choice you end up making, we take into consideration our customer’s budget and offer cheap car insurance quotes in Bradenton, FL. Contact us today!