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How the age of a car affects insurance rates

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Age of Car and Auto Insurance

New or used? SUV or sedan? Safe or flashy? Gas or electric? There are so many variable to consider when looking for a car. All of these decisions will affect car insurance rates.

What Factors Do Insurance Companies Consider?

New cars might have more safety features. However, they might also have more technology that could be damaged. They can also have more miles and wear and tear on the vehicle. Insurance companies consider things like miles driven and safety features. They also look at what technology is included on the vehicle, such as a back-up camera, bluetooth audio, hands free calling, blind spot monitor, emergency breaking systems, etc. The more safety features that are included on the vehicle, the less risk to the driver. This protects you on the road and limits damage in the case of an accident. Insurance companies feel more comfortable with this so rates for safer cars are lower.

The likelihood of theft on the model of car is also a factor. Newer cars have voice activated engines, push to start technology, GPS tracking, and certain anti-theft features. Older vehicles are theoretically easier to break into, requiring more insurance for stolen cars as well as parts.

Type of Insurance for Old and New Cars

When looking at the types of coverage for vehicles, there are some that are superfluous for old cars, such as comprehensive insurance. This coverage would cover the total value of the car that is either stolen or damaged. With an old model, the cost effective decision would be to opt out of this coverage and just purchase the required liability insurance.

Comparatively, if you have a brand new car, there is much to be worried about when a car is stolen or damaged. There is the coverage of the remaining loan and the total amount they have already paid for the vehicle.  In the common scenario of the fender bender, damage to parts of the vehicle will require small to medium repairs. Old cars have parts that are less expensive and will cost less in labor to fix. Newer cars require specific parts that are less likely to be interchangeable between models and more expensive to replace due to dealership fees.

Conclusion

Thus, when looking to purchase a car, the age of the car is an important feature to keep in mind for several reasons. There are some makes and models that are cheaper to buy and cheaper to insure such as a 2000 Mazda vs a 1960 Cadillac. Old cars can be more cost effective in some ways. New cars have a lot of benefits, but those features can be costly to insure. Keep these features in mind when you’re on the lot or shopping online. An analysis of pros and cons can be helpful. Comparison is key when looking to purchase a new or used car.

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