Difference between a new car and used car insurance
Car insurance companies provide car insurance policies for new cars and used cars at different rates. While deciding the car insurance policies car insurers consider different factors such as the list price of the car, repair cost, age of the vehicle. To get the best car insurance policy you can compare the car insurance quotes from different car insurance companies according to the type of your car.
Which car insurance is cheaper: new car insurance or used car insurance?
It is difficult to say which car is cheaper to insure, a new car or a used car. The only type or age of the car is not sufficient to calculate the car insurance premiums. Different factors are used by car insurance agents to decide the car insurance premium. Car insurance premiums depend upon various factors such as, make and model of the car, age of the car, driving history, credit record of the driver, location, your car insurance company, the repair cost of the car, etc.
The car insurance agent also considers the safety features of the car, repair cost, etc before deciding the car insurance premiums for customers. The new car repair cost is less than the repair cost of old cars. Parts of new cars are easily replaceable than old cars. Car insurance rates also depend upon the vehicle you are comparing. According to data gathered by MyMoneyMyQuotes’ team car insurers may charge $120 higher car insurance premiums for a six-month policy on new cars than old cars. We found the data of some largest car insurance companies that provide car insurance policies on new cars and used cars.
|Name of the car insurance company||Average insurance premium on a new car for six months policy||Average insurance premium on the old car for six months policy|
Before buying a new car always check car insurance premiums from different car insurance companies. Different car insurance companies provide the cheapest car insurance policies to their customers on new cars. Car insurance premiums decrease by 3% for every year with your car’s age. The car insurance policies of old cars are cheaper than the new car insurance policies.
|Age of the vehicle||Average car insurance premium for a six-month policy|
How does car insurance premium change on a new car vs. a used car?
The selection of insurance coverage depends upon the type of vehicle. Car insurance cost is also different for a different type of car. If you purchased a new car then it is wise to purchase additional coverage with your car insurance policy. It is not mandatory in case of a used car because it may just put an extra cost in your pocket. It is beneficial to include collision coverage and comprehensive coverage in your car insurance policy. It helps to cover the damages due to theft, vandalism, collision with animals, bad weather, etc. Gap insurance is also beneficial for new car owners.
Collision coverage and comprehensive coverage
Collision coverage and comprehensive coverage protects you against the payment of damages if you had an accident. In some states of the USA, drivers must purchase liability coverage, collision coverage, and comprehensive coverage in a car insurance policy to drive legally if stated in your loan and lease agreement. It is good to include collision coverage and comprehensive coverage in your car insurance policy if your car is worth more than $4000.
Gap insurance or lease payoff/ loan payoff
If you purchased a new car then it is wise to buy gap insurance or lease/loan payoff. These help to cover if your car is totaled by the car insurance company and payments made by the car insurance company does not cover the loan amount for your car. For example, if you purchased a car on a loan worth $25000, unexpectedly your car was totaled after six months. You could receive only $20000 because the value of your car depreciates with time. This leaves a difference of $5000 which can be covered with the gap insurance.
Compare insurance rates
To get the cheapest car insurance you must compare car insurance quotes from different car insurance companies. By comparing insurance rates you can select the best car insurance policy that is suitable for you.
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