With the battered economy, many people dismiss the idea of buying brand-new fancy cars. Instead, more and more people nowadays are buying used vehicles. Second-hand vehicles are often purchased by those who simply need a mode of transportation for their everyday lives. Since they have tight budget, many of them ignore applying for used car insurance.
Technically speaking, there is not much difference between new and used vehicle insurance packages. What differs, however, is the little details that outline the policies themselves. However, when we talk about primary purpose, both of them aim to stay away from liability in case of a road accident. This means liability in terms of damages and injuries incurred to your auto, your passengers, other vehicles involved, and the passengers of these vehicles.
What is the major difference? Look at their price tags and you will see the obvious difference. Of course, the new car insurance policy comes at higher rates whereas the used car insurance package is significantly cheaper. Why is that? If a brand-new vehicle is irreparably damaged or stolen, then an insurer would lose huge chunks of money. On the other hand, if a used vehicle is damaged or stolen, then the insurer would only lose small a amount of money. Since there is low risk of losing a lot of money, the company can charge the policy owner lower monthly premiums.
What are the things you must consider when getting a cheap policy package for your used auto? One way to get less expensive used car insurance is to check your driving record and make sure it reflects something good. Just like buying a new car insurance package, be sure that your driving history is clean, free of speeding tickets, DUI’s, and traffic violations, among others. Having a spotty record creates signals to insurers that you are one risky driver and, thus, a risky customer to deal with. Remember, insurers would charge high-risk drivers extremely high monthly premiums. Again, the best way to keep a spotless record is to follow traffic rules and regulations and drive carefully.
Other factors that greatly affect premium rates include your driving experience, your location, the areas where you will drive mostly, as well as your parking arrangements. You have a good chance to get lower premiums if you have been driving for years, if you frequent quiet and peaceful residential areas, or if you park your vehicle on a secure spot. The model of your car also affects your used car insurance rate. High-performance cars come with much higher premiums because they require more maintenance.