Are Used Cars Cheaper to Insure?

One of the necessary parts of buying a new or used car is getting the appropriate auto insurance for it. Nearly every state requires having at least some kind of insurance before you can legally drive. Some shoppers will get quotes for insurance before they actually make the purchase, while others wait until they’ve got their new keys in hand. Regardless of when you get quotes, insurance should be part of your overall vehicle budget. Of course, when asked, “are used cars cheaper to insure?” thrifty drivers will declare that they are. Unfortunately, this isn’t a hands-down true statement. Because there are so many factors that impact insurance rates, it’s impossible to say any kind of vehicle will always be more or less expensive to insure than another.

Here are some factors to consider when asking yourself, “are used cars cheaper to insure?”

Used Car Insurance Prices

It is true that people with older cars typically pay less for their auto insurance; however, it’s not necessarily because those cars are necessarily cheaper to insure. The main reason older used cars cost less to insure is because of their loss in value. It’s known that cars depreciate in value as they age. New cars depreciate much faster than used cars, but all cars lose their values over time. As the value of the vehicle decreases, drivers tend to lower the level of insurance they keep on the vehicle. For example, someone with a brand new car is likely to have comprehensive insurance with collision coverage. This level of coverage might even be a requirement from the driver’s lender. Someone with an older used car may remove comprehensive, collision, or both from their policy. This has to do with the maximum payout you’d get from the insurance company. If a newer car is in an accident, the insurance company may pay out something close to the list price. A car with ten years under its belt is only going to get enough money to buy a comparable used car. Even though the payout is different for these two cars, the cost of insurance really doesn’t change as the car ages.

When Used Cars Aren’t Cheaper In Insure

While value plays a huge role in your decision on how to ensure your vehicle, it’s not the only factor to consider. Sadly, there is no consistent relationship between the age of a car, its value, and its cost to insure. The most important thing to consider is that different insurance companies look at different things to determine your insurance prices. That’s why it’s critical that you get multiple insurance quotes from various insurance companies.

The age of the car can also work against you in terms of insurance prices. For example, a new model may come with advanced driver-assist features that help drivers avoid accidents. Systems
like pedestrian detection, automatic braking, blind-spot monitoring, etc., may earn your car a higher safety rating and lower insurance risk. Compare that car with an older model that doesn’t have those safety systems, and the used car may cost more.

Classic and Antique Cars

Specialty cars are in an entirely different insurance game. You can often get regular car insurance for these classics, but there is also a special classic car coverage as well. This kind of policy is designed for collectibles. These policies may cover a higher value than the list price but may also come with mileage restrictions.

Compare Quotes And Save

The only consistency in auto insurance is that the state’s minimum coverages don’t tend to change much when comparing new cars to used cars. Of course, comparing a used, high-end Mustang to a new Chevrolet Spark won’t produce the best comparison. You should stick to the same make and models to get a fair view. Whether you’re looking to insure a brand new truck, a certified pre-owned car, an older SUV, or a classic streetcar, the best way to get your best insurance quote is to check with multiple insurance providers. It’s even worth rechecking every year or so to make sure you’re getting the best price for your coverage.