Does It Cost More To Insure A Brand-New Car?
Posted on: 12 October 2020
When you trade your older car in for a brand-new vehicle, should you expect to pay more for your insurance? Most people would assume that it will cost more to insure a brand-new car, but this is not always the case. It might cost more in some cases. In other cases, though, it might cost less. Here are several things to understand about the cost differences for insuring an older car and a newer car.
The Types of Coverage You Had Compared to What You Need
One of the main reasons your insurance premiums will change when you get a new car is the differences in coverage types. If you own an older vehicle without a loan, you might have a liability-only policy. If you trade the older car in and get a loan on your brand-new vehicle, you will need more than liability-only coverage. You will need a full-coverage policy, and full-coverage insurance costs more than liability coverage. As a result, your premiums might increase due to the changes in coverage you need for your new car. If you already have full-coverage insurance, you might not see a huge increase in costs when trading in your vehicle.
The Safety Features of the Vehicles
The second thing to know is that safety features affect your premiums. As a result, you might pay less for your insurance coverage on your brand-new car. New cars often come equipped with the best safety features and ratings, whereas older cars might not offer these features. If your new vehicle is highly safe, you might see a decrease in your auto insurance rates after trading in your vehicle.
Your Driving Record and Demographics
The other factor that always affects insurance rates is your driving record. Your demographics also play a role in your rates. If you have past accidents or violations on your driving record, you might already be paying a lot for your coverage. If you trade your car in, your rates might slightly increase, but they might not increase a lot. Your demographics include your gender and age, and these factors also play a role in rates.
If you want to get a new car by trading in your old one, you can contact an insurance agent to find out more about the cost differences. Having car insurance is always necessary when you own a car, but the types you need might vary depending on the car you own. For more information about car insurance, contact a local insurance agent.
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