What is cheaper to insure, a new car or an old car?
What is cheaper to insure, a new car or an old car? Now that dealerships have replenished their inventories after the pandemic, prices of used cars are beginning to drop. In an inflationary scenario, those looking to buy a car not only wonder about the price but also ask, which insurance is more expensive, that of a used car or a new one?
Truly, there is no clear answer to this question since each car, model, and brand has its own peculiarities. Nevertheless, we can establish that a new car usually tends to be more expensive to insure than a used one.
Although generally a new vehicle has state-of-the-art safety features, which theoretically reduce the risk of accidents, factors such as replacement cost influence these automobiles being more expensive to insure.
Without this being a golden rule, some studies show that insurance rates for a car decrease by 3.4% for each year the vehicle ages. That is to say, insurance for a 10-year-old vehicle is 25% cheaper than for a new vehicle.
On the other hand, vehicles may require different types of coverage. Generally, a new car or a second-hand car bought through a loan, in addition to the minimum coverages required by the state – Personal Injury Protection (PIP) and Property Damage Liability (PDL), will require mandatory policies such as collision and comprehensive. However, a second-hand car bought outright will only require PIP and PDL, making the insurance cheaper.
It is no less true that almost all insurers offer discounts for vehicles with advanced protections such as airbags, anti-lock brakes, anti-theft systems, which tend to reduce insurance premium prices.
In conclusion, if you want to buy a car, whether it’s used or new, contact Univista Insurance, and you’ll get the cheapest insurance on the market with the best benefits. What is cheaper to insure, a new car or an old car?