Many people ask this same very good question. Are new or pre-owned vehicles cheaper to insure? Well, this question is not easy to answer quickly. It is a little like asking if blue or brown houses cost more. The cost of the house is not based on the paint, and so the cost of coverage is not totally based on the age of the auto.
Some used vehicles may be very expensive to insure. They may be luxury models, classic cars, or custom hot rods. But on the whole, if you are comparing similar types of vehicles, you can find some ways to save money with an older and less valuable car.
As you already know, insurers consider lots of things when they set rates. Sometimes a brand new vehicle will have the latest features that these companies love to discount. These could be safety features, anti-theft devices, or even hybrid energy engines
Here are some tips to save money with an older vehicle. Most of us have to purchase a liability policy in order to be a legal driver. But we may only need to purchase full auto coverage because a lender requires it. If we can afford to get an older vehicle paid off, we will not have that requirement.
Now you must consider the decision to pass on full auto coverage because it means you assume more risk. But it can save you a lot of money every month, especially if you are covering a higher risk driver. So it is up to you, and your insurance agent, to balance the cost vs. the risk.
You can also pass on GAP insurance if your auto is paid off. GAP insurance covers the difference between the book value of your car and the amount left on your loan. These days, many people find that they owe more on their cars than the actual stated value of the car. This can happen on newer or older cars.
Find out how much a car costs to insure. Stop by to compare car insurance with simple online quote forms.
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