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New car insurance vs. old car insurance


Most people would say that car insurance companies prefer insuring old cars rather than new cars. They say the car insurance premium rate is much cheaper than new car insurance, so it would be justifiable to get an old car over a brand new car. Although this information is quite true, it should not be followed religiously. There are some people who prefer to buy new cars. They should not be held back because they have their own reasons why they want to purchase a brand new vehicle, and with this comes the costs of new car insurance.

The only reason why auto insurance companies prefer old cars from new ones is because their cost of repair is significantly less. Old car owners don’t usually get new car parts for their repairs. They use alternative car parts. These are parts that are not made by the original makers of the car, but is a suitable and cheaper alternative. Its quality is not compromised; they are simply not branded. These parts are conveniently available in many car repair shops in the nation, and because they are widely distributed, they are less expensive. When old cars are damaged in a car accident, car insurance companies can easily find repair shops that can cater to the vehicle. To summarize, old cars are less of a money-risk than a new vehicle because it costs less. It favors the auto insurance companies and in return, they provide discounts to people who have them.

For new cars on the other hand, the reason why auto insurance companies give out a high premium, is because they have a higher repair cost and they have a higher theft risk. Its high value catches the attention of car thieves. Thieves are attracted to newer car models. They want something they can sell for a good amount of money. When a new vehicle gets engaged in a car accident, it usually needs to have new parts. Most people prefer parts directly from the car manufacturer. Now, the problem with these parts is they still need to be ordered and shipped, unlike alternative car parts that are available everywhere. This means additional costs for the car insurance companies. So basically, car insurance companies give a high premium in order for them to cover more costs. However, this is not enough reason for people who can afford new cars to be held back.