Have you ever wondered why different cars cost you different amounts of auto insurance premiums? Why could a new Corvette cost you $ 1,600 a month in car insurance and an old Buick Regal could cost you only $ 90 a month? The cost of new car insurance versus the cost of old car insurance is a topic to review before purchasing any car. Check your insurance costs before you buy and you won’t be caught in a financial trap.
New cars cost more to insure than old cars, for three reasons. First, the automatic theft of a new and exotic car costs much more than the automatic theft of an old and midsize car. This is due to the huge difference in value between the new car and the old one. For example, the new Chevy Caprice is more expensive to insure than the old Chevy Caprice. Replacing an expensive new car simply costs more money compared to a less expensive older car.
Second, the cost of repairing a new car is much higher than the cost of repairing an old one. As such, this fact will also add to the premium cost of a new car. For example, if a new Chevy Caprice was damaged in an accident, the auto repair shop will charge you more money for repairs than if the car in question were a 10-year-old Chevy Caprice. For this reason, your insurance company will charge you significantly higher premiums for a new vehicle than an old one due to these repair costs.
Third, the make and model of the vehicle will also have a significant impact on the cost of auto insurance premiums that your insurance company will charge you. Insurers use actuarial statistical tables that show them past loss experience on specific styles and types of cars. They use these tables to help calculate the insurance premiums they will charge their clients in the future. Statistical tables from these insurance companies show that owners of certain styles and types of cars, such as sports cars, engage in riskier driving behaviors than owners of midsize type and style cars.
For example, the insurer’s statistical tables show that the insurance company suffered more losses on sports cars than on normal cars. This is because a Corvette owner is likely to drive such a car faster and riskier than a Toyota Camry owner. With this speed and risk it also comes with more losses for the insurance companies. As these risks and losses increase, the insurance company must increase its returns and impose more fees on auto insurance premiums.
Another example of how the type and style of a vehicle can present a riskier insurance company is off-road vehicles such as the Hummer line of vehicles. These vehicles are designed to operate in off-road environments. It lifts more off the ground than normal cars to clear the transfer car. In addition, they also have the possibility of four-wheel drive.
With these design capabilities, the statistical tables show that the insurance company has had more losses with these types of cars than with normal cars. This is because the owners of these vehicles will engage in off-road driving which is dangerous for the car and the driver. In fact, some insurance companies may prohibit compensation for such damages, when the owner of the insured vehicle is injured during risky off-road driving. Again, with more risk, the insurance company would increase the yield and therefore the auto insurance premiums. Now that you know that certain styles and types of cars cost more to insure than others, you need to be smart about the type of car you are buying.
Instead of guessing what you think auto insurance costs, contact your auto insurance company and ask your insurance agent for a free auto insurance quote for the exact type of vehicle you want to buy. You can get a specific answer to your question about whether you can afford the cost of the car and the insurance premiums necessary to cover your car against insured losses or not.
The time for this evaluation is not after the vehicle has been purchased. By this time, it was too late. The time to perform this assessment is before purchasing a vehicle. You definitely want to be able to pay your car premiums and insurance premiums. Get a free car insurance quote in advance and avoid financial trouble.