Are you getting ready to buy a car? Congratulations! Whether it's brand new or just new to you, you probably have some car insurance questions running through your mind.
You may wonder, "How much does car insurance cost," and "What type of coverage do I need for a new car vs. a used one?" If so, follow along to get the answers to your questions about car insurance for new and used cars.
How Much Does Car Insurance Cost?
Unfortunately, there's no easy answer to this question. A variety of factors go into calculating auto insurance rates, and many of them have to do with you, not your vehicle.
However, the top factors that affect car insurance include your:
Driving history: If your driving record is free of auto accidents and traffic tickets, you're likely to pay less than someone with a bruised driving record. Insurers incentivize safe driving habits by giving better prices to better drivers.
Location: Where you live matters. It can have a significant impact on your car insurance rates. For instance, some states might require more coverage than others — and more coverage can drive up your premiums. Also, living in an area with a high rate of accidents or car thefts increases your likelihood of making costly claims. Some insurance companies account for those expensive claims by charging higher prices in those zip codes.
Car mileage: Let's say you drive a total of five miles to and from work each day. Your neighbor, however, commutes 50 miles a day. Even if you drive a similar car and have the same insurance company, your neighbor's premiums are probably higher. Why? Because more time on the road translates into higher odds of being in an accident.
Age: When you're under 25, the risk of crashing your car may be higher due to a lack of behind-the-wheel experience. Accordingly, your car insurance rates may go down when you join the quarter-century club.
You might see another decrease in premiums when you turn 55. Since many older adults drive less, they typically pay lower rates, up to age 70. Insurance rates tend to go up for drivers over 70 because they’re statistically more likely to be involved in fatal accidents.
Gender: Statistics show that female drivers don't get into as many car accidents (or as many serious accidents) as male drivers do. So, when it comes to insurance rates, female drivers may pay less! Sorry, guys.
Type of car: You may pay higher rates if your car is expensive because it can be costly to repair or replace in the event of an accident or theft. Likewise, higher rates are common for drivers of cars with poor safety ratings or vehicles with a high likelihood of being stolen.
Your credit-based score: In many states, auto insurers use a credit-related insurance score to help determine your premium. Essentially, insurance companies take creditworthiness as a sign that an individual is less likely to file a claim. As a result, those with better scores may get better rates!
Coverage for a New Car vs. Used Car
Whether you're buying a new or used car, you'll almost certainly need to purchase a minimum amount of coverage to secure an auto loan or lease. A lender can require you to get more coverage than the legal minimum in your state (bodily injury liability and property liability insurance, in most states).
Why do lenders require you to get additional coverage like comprehensive and collision? It's simple: Until you've paid off the loan or ended the lease, the car technically belongs to the lender. By requiring a minimum level of coverage, the loan provider protects its investment.
Bottom line: Having an auto loan or lease might lead to higher car premiums.
Does It Cost More to Insure a New Car or a Used Car?
Regardless of whether you have a loan or lease, a new car often costs more to insure than a used one. The reason: A new vehicle is generally worth more than a used car. So, if your new ride gets damaged or stolen, the insurance company will have to pay more to fix or replace it.
However, it's not always the case that insurance costs more for a new car than a used one. Depending on the make, model, and year, a used car may be more likely to get stolen for its parts. As a matter of fact, the National Insurance Crime Bureau says the most stolen cars in 2017 in the U.S. were the 1998 Honda Civic and the 1997 Honda Accord. Drivers of these older but popular models may pay higher rates than those that drive more recent ones.
You might also get cheaper car insurance when you switch to a newer model if it has a better safety rating than your old one.
Get Insurance for Your New or Used Ride
On the fence about buying a used car or a new car? Get Direct and get going. Whatever type of vehicle you purchase, Direct Auto can help you protect it with the right insurance. We offer affordable insurance for new and used cars alike. Call, click, or come into your neighborhood Direct Auto for help getting car insurance coverage for you and your new ride.