Do you ever think why dissimilar cars cost you different amounts for car insurance premiums? Why is it that a new Audi may cost you approximately a lakh a month in car insurance and an older i10 may only cost you only 5K a month? The new car insurance vs. the old car insurance cost is a matter that you must review prior to buying any car. It is because by reviewing such costs first will prevent you from getting caught in any financial trap.
The new cars, without a doubt, cost more than the old automobiles for three reasons:
- Primarily, an auto theft of the new and exotic vehicle costs much more than that of the older and the average style automobile. It is because of the great difference in the value of the new and old car. For instance, a new Chevy is pricier to insure than an older Chevy. It simply costs more money to replace a brand new and expensive car than the older, affordable one.
- Second, the price to repair a new car is much more than the price to repair an old one. As such, this fact shall also amplify your car insurance premium online rate for a new car. For instance, if the new Chevy gets damaged in an accident, then the auto repair shop will probably charge more money for the repairs than if the subject automobile is a ten-year-old Chevy. It is for this reason that your car insurance provider will make you pay much more on insurance premiums for a new automobile than an older one because of such pricey repairs.
- Third, the type and style of the vehicle shall also greatly affect the price of the car insurance premiums that your insurance company will charge you. The insurance companies employ the use of the actuarial statistic tables that display them the former loss experience on specific types and styles of cars. They employ the use of that table to help calculate what premiums they must charge their customers in the future. Such statistical tables exhibit that owners of certain types and styles of cars like a sports car will engage in more risky driving pattern as compared to the owners of the vehicle that are of average style and type.
For instance, the car insurance provider arithmetical tables show that one experiences more losses with expensive sports cars than with the average cars. It is due to the fact that the owner of Corvette will perhaps drive such a car quicker and riskier than the owner of a Toyota. With such risk and speed also come more losses for the insurance companies. The car insurance company, therefore, charges more on the premiums.
Another great example of how the style and type of car may present an insurance company with more risk is the off-road style cars like the Hummer line of vehicles. Such cars are designed to perform well in the off-road kind environment. They are raised up off the ground more than the regular cars under the carriage clearance. In addition to all that, they also possess four-wheel drive competence.
With such design capabilities, the statistical tables display that the car insurance company will experience more losses with such types of cars than the regular ones. It is because such a car owner will participate in off-street driving, which is both dangerous for the owner/driver and the vehicle. In fact, some of the car insurance providers may bar retrieval for such damages, when the driver of the insured car faced damages while engaging in any risk and off-road driving. With more risk, again, the car insurance company will increase return, thereby increasing the car insurance premiums.
Now that you are aware of the fact that certain types and styles of cars cost more to the insured than the others, you know now that you have to be smart about what type of car you are going to purchase.
Rather than taking a mere guess, call your car insurance company or go to Coverfox to compare the car insurance quotes and then make the assessment on what kind of car and insurance you can afford to purchase.
It is a fact that a car without insurance is at grave risk and paying higher for the car insurance doesn’t make sense either. Therefore, explore all your options prior to purchasing your car and the suitable car insurance by going through all the available options on the comparison site.