January 8, 2010

Are Old Cars Better Than New Cars When It Comes To Auto Insurance Costs

Buying a new car is a big decision with many factors to consider. Often, in making this choice, the thought of the auto insurance premiums that may accompany this new purchase is as an afterthought. However, like gas mileage, these premiums add up over the life of the car and should be considered when making purchase decisions. A little research may yield some surprising findings, especially when considering a new car versus an older model. Older cars can actually be better than new cars when it comes to auto insurance costs.

While the factors that go into calculating car insurance premiums can seem obscure to the average insurance consumer, many of the insurance companies’ concerns mirror those of the consumers. At the top of the list of concerns are cost, safety and risk of theft. While other elements come into play when determining insurance rates, a buyer can control these factors. When considering an older model, start with the vehicle’s safety rating. Older models need to have modern safety features to secure lower premiums. Look for models with proven safety records, such as five-star safety ratings from the National Highway Traffic Safety Administration. In general, larger cars have higher safety ratings than smaller ones, but there are exceptions. Safety features such as airbags, seatbelt types and anti-lock brakes can often save you money with your insurance provider. When considering an older model, use these features as a guide to help keep your premium costs down.

Theft deterrent features may also lower you insurance premiums. More expensive new and luxury cars may have lower theft risks, which can make up for the high sticker prices and lower safety ratings. For older models, research theft rates in your area for the type of vehicle you are considering. The National Highway Traffic Safety Administration is a good source for this kind of information. In addition to theft, costs for repair and frequency of claims can also drive up auto insurance premiums. The Insurance Institute for Highway Safety, which provides data on frequency of insurance claims for specific vehicle models, is one resource for investigating potential red flags. When considering an older model, availability of parts and service should also be considered.

Older cars have an initial advantage in terms of auto insurance premiums, given that they are generally less expensive than newer models. Capitalizing on this advantage and translating it to an actual lower premium requires some research and careful decision-making. Talking to an insurance agent and requesting an auto insurance quote is the surest way to determine auto insurance costs. Keeping all these guidelines in mind can help steer you towards auto insurance savings.