If you are currently facing a financial crisis you would not want to consider buying a new car. Aside from it being expensive, new cars also mean high insurance rates. To avoid spending so much for a new vehicle together with its high insurance policy, you should think of another option. How about purchasing a used car instead? Used cars will not only enable you to save money on the car itself, it will also lower the prices of your insurance policy.
What is the difference? It is the price. The more your car is worth, the more it will take you to cover its insurance. Used car insurance rates would then be much lower compared to new car insurance policies because if a used car is damaged or stolen, the insurance company would not spend as much money replacing its parts as they would if it was new. These companies would also charge less for different policies on a used car which in turn would lower your monthly premium.
Although used car insurance rates are relatively low, it also depends on the driver or owner. If you possess a clean driving record, you do not need to worry at all. Your rates will surely hit an all-time low. However, if you have already experienced several accidents in the past, having a used car would not be much of a factor in terms of costs.
The car itself is one crucial factor affecting used car insurance rates. High-risk used vehicles often get high rates because they are either accident prone or they have a high rate of theft, resulting in a claim. In addition, high rates are given to vehicles which have a high repair rate.
Other used car statistics which are important to determine premiums have to do with the car’s damage and engine power. By damage power, it refers to the car’s capacity to wreck another vehicle or destroy property. Engine power, on the other hand, has to do with its maximum speed and fuel consumption. Auto insurance companies take note of these stats because they also affect expenditures which will be done both by the company and owner.
A key difference between used cars and new cars is the price. Some aspects like the driver’s profile, high-risk vehicles and car statistics may still affect used car insurance rates. Still, they are relatively cheaper compared to new car insurance rates.