If you are new to car insurance and would like to know whether there is a difference in insuring a new car versus an old car, the answer is yes. The main difference is the cost to insure these types of cars.
If you have new vehicle, it is much more expensive to insure because of its “risky” value. Auto insurance companies; want to make sure that they spend less for it when claims are filed. This is to protect their business from going bankrupt. They tag vehicles as “risky” if these are potential money-takers. Take luxury cars for example. Luxury cars are very expensive and the cost to insure them is expensive as well. This is because these cars are more prone to car theft. If these types of cars are stolen, claims are filed. This costs insurance companies large amounts of money because of the luxury cars’ high value. This is the same with new cars. New cars are also prone to car theft depending on the make and model. Another is that when this type of car is involved in a car accident, the cost of repair is quite expensive, because brand new car parts are costly. The higher the probable cost when a claim is filed for a brand new car, the higher the car insurance premium rate will be.
On the other hand, when you insure a second hand car or an older car, the cost is not that expensive. Why? Well, first, it is not prone to car theft. You can park your old or second hand car in an alley and it is less likely to be stolen or robbed than a brand new car. Second, when it becomes involved in a car accident, second hand car parts can be used to fix the vehicle and are much more inexpensive than new ones. Plus, they can be found in almost any car repair shop opposed to brand new parts that need to be ordered from the car manufacturer. You may argue that an old car is less safe than a brand new one because it’s not that sturdy anymore. Well, the solution to that is people can install safety devices and still receive cheaper auto insurance.