Spoiler alert: A used car is usually a bit cheaper to insure — but not always, and the difference in cost might be less than you think. First, it’s important to understand the factors that affect auto insurance rates. There can be thousands of these, so we won’t cover them all. Instead, we’ll look at the largest factors that affect rates and which are based on the car itself.

Insured Value

If you have full coverage, your auto insurance policy can cover the replacement cost of a vehicle if your vehicle is destroyed due to a covered claim. Generally, new cars have a higher replacement cost value, which adds to the cost of insurance. A new car might have a replacement cost value of $30,000, for example, whereas a used car might only be worth a fraction of that value. A larger risk for the insurer — meaning the potential claim might be bigger — can affect the cost of insuring the vehicle.

Repair Costs

Newer cars can cost more to repair but that’s not always the case. The make and model likely have more to do with repair costs than a model’s year. All cars have 4 wheels and an engine but then you’ll start to find differences in how the vehicles are built and how easy they are to repair.

Theft Risk

It’s common to think that new cars pose a greater risk of theft. Perhaps surprisingly, some models of used cars are stolen much more frequently. Often, the demand for used vehicles can be attributed to the value of the parts. For newer cars, replacement parts are in lower demand. For used cars, the parts may be worth much more than the vehicle itself.

Safety Features

Newer cars often have more safety features which can reduce the risk of an accident. Lower risk can translate to lower premiums or help offset the cost of insuring a vehicle with a higher replacement cost value. However, safety features can also have an effect on how well a vehicle protects passengers, pedestrians, and the occupants of other vehicles. Insurers also measure the claim’s severity for vehicles, which includes the amount of damage to people or property. Factors like bumper height, vehicle weight, and the shape of the vehicle can all have an effect on the damage a vehicle can cause, which can then affect rates. These factors aren’t based on vehicle age but rather vehicle design.

Before buying a new or preowned vehicle consider reaching out to Coburn Insurance Brokers for a quote. You might find meaningful differences in insurance cost even for vehicles of the same year and type. Insurance rates can be based on hundreds or even thousands of factors but vehicle safety plays a big role and you can expect rates to reflect the overall safety of a vehicle.

Planning on Buying a New Car?

To retain the value of your new car it is always good to get depreciation waiver coverage. Contact Coburn Insurance Brokers to learn more about your options.

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