More and more car owners today are saving extra dollars by keeping and maintaining their existing cars instead of purchasing newer models. Now, the current financial condition still has them looking over their old vehicles, but in an attempt to save more, drivers today also tune up their aging vehicle’s insurance.
Major insurance providers in US states such as New York say that the changes in consumer attitude are happening extremely well day after day. According to them, New York policyholders look for more ways to save on car insurance, and of them is by maintaining their old cars as well as their old insurance policy papers. Insurance companies from Minnesota and Illinois also noticed that their clients are keeping their cars much longer and refrain from purchase recently released car models. Industry experts say this might be because drivers have realized that a good way to cut back in premium costs it to have higher deductibles.
According to studies, modern vehicles and recently released models have what it takes to last longer with their more powerful engines and improved technology when compared to older cars. However, motorists still prefer older vehicles. A study was conducted by insurance providers to determine the growing trend in the car preference of most consumers. The study shows that consumers who prefer older vehicles believe that in owning older cars, they can but back in their insurance expenditures. Since older models are worth much less than expensive top of the line cars, insurance for aged cars can be reduced to be affordable amounts.
However, a group of insurance experts say that the belief of consumers in saving money from keeping old cars is based on misleading facts. Insurance experts argue that the problem with keeping aging vehicles is that car owners tend to have problems in determining the vehicle’s real worth due to rapid depreciation. When this happens, there is an increase in the possibility for the vehicle to be overinsured. Studies have proven that drivers, especially those who financed their cars, fail to realize their car’s real value. In the case with financed vehicles, drivers forget the fact that they can lessen the amount of comprehensive and collision coverage after the vehicle has been fully paid as lenders tend to require much higher levels of coverage.
Currently, New York, Illinois and Minnesota are the states where a rising trend in preferring to keep aging cars has been noticed. Insurance experts say that if insurance providers do not do their part of educating their customers, the trend may end up in observable in other states as well.