May 21, 2012

3 Reasons To Consider An Older Car

When shopping for a vehicle, there are many variables for the consumer to consider, particularly for the shopper that is on a budget. When car shopping, it is important to think about automobile insurance as well. Many factors will influence the price of insuring a vehicle, and since newer cars are more expensive to insure, the consumer might want to consider purchasing an older car in order to obtain cheap car insurance. Here are three factors to consider in regards to older cars that could help keep insurance premiums lower.

First there is depreciation value. As a car ages, its book value depreciates. For example: a car released to the market in 1999 may have had a $40,000 book value, but in 2012 that may have depreciated to $4000 or lower. This, of course, is dependent on the car's model, condition, and its history of claims. This usually means it will cost less to insure an older car, while a new $40,000 car will definitely come with a higher automobile insurance price tag.

Secondly, older cars generally have a lower rate of theft. This is another excellent reason to consider a used vehicle versus a new one. Newer vehicles instantly come with a higher risk of theft, partly due to their higher price tags. Based on this, newer vehicles will always be more expensive to insure than older cars. When considering an older car, the car consumer should look at the claims history for the particular model they are considering. Look for older car models that had, and still have a lower risk of theft in order to obtain cheap car insurance. Also, car consumers should use online car insurance quote engines to check insurance premium rates for the older cars they are considering. They can also search for the cheapest insurance rates possible.

Lastly, the consumer might want to consider older vehicles to keep their collision insurance rates low. Because the value of a new car will be higher, collision insurance will also be more expensive to insure damages are adequately covered. However, with an older vehicle that has a lower book value, collision insurance will be cheaper, since the older vehicle involved in an accident will require less money to restore to its current condition. In some cases, it may be even be a total write off. A car with a book value of $4000 can be written off, and a check for that amount issued to replace the vehicle.

So if cheap car insurance were a must for the car consumer, an older vehicle with a lower book value and infrequent claims history would be the best bet for keeping their automobile insurance affordable.