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Factors to take note of when purchasing used car insurance


If you have purchased a new car, you might obviously be interested in buying insurance as well depending upon your level of confidence, comfort and your budget. However, the process of decision making when it comes to purchased used car insurance is different when compared to purchasing new car insurance.

Firstly, the age of the car decides to a large extent whether you should go for used car insurance. If it is a very old car, its market price is lowered significantly and hence paying a premium for theft coverage or totaled car coverage doesn’t make financial sense. This is because even if you pay the premium, the totaled car compensation that you would receive will be very less and in some cases lower than the insurance premium amounts that you have paid. Similarly, the chances of an old car being stolen are low and in case of an accident, you wouldn’t really consider going for repairs. Hence, the car make and model, its market price and mileage to date, are all important parameters to take note of before purchasing insurance for collision.

At the same time, you might consider going for personal injury protection or PIP especially if you feel that the used car is riskier compared to driving a new car. Whether you have a pending loan amount on the used car is also a factor to take note of. If there is a pending debt, you might consider going for an insurance coverage that will ensure that you will get enough compensation to pay off the debt even if the car is stolen or damaged in an accident.

While purchasing used car insurance you must look at factors like anti-theft mechanisms, safety mechanisms like side air bags and navigation-assistance mechanisms. With all these in place, your car becomes relatively safer and hence less risky on the roads. The used car insurance in such cases is lower than normal. A safe car lowers the risk of accident or theft and hence lowers the chances of your claiming for compensation. Therefore, the auto insurance premium is also relatively low. Similarly, a used car which is a sedan is relatively cheaper to insure as opposed to an SUV, as the former is safer. On the other hand, luxury cars are expensive to insure even if they are old as the spare parts are costly and also difficult to procure raising the damage repair costs.