Buying An Older Car: What Does It Mean For Your Auto Insurance Rates?

Thinking about buying an older car but aren’t sure what it will do to your auto insurance rates? While age of a vehicle is definitely a factor in what most companies charge, it’s not the only one. If you would really like to know what your car purchase might mean to future premiums, here is everything you’ll need to keep in mind.


Age, Make, Model

How old your car is will influence the final rating because the more birthdays it has, the more value it loses. Lesser value means that it’s less expensive to insure. In other words, your insurance company doesn’t have as much to lose in the event of an accident. One thing to remember here, though, is that different makes and models depreciate at different rates depending on how much wear and tear has been placed upon them. Therefore, your used car may not necessarily be cheaper to insure as that brand new economy car.

Makes and models have a tremendous impact. For example, a high-end luxury sedan usually costs more to insure because there is a higher value from the very beginning. The cost to replace parts, make repairs, or totally replace, if needed, can be greatly expensive for your insurer. As a result, you’ll need to pay a higher premium.

Just as an example, I recently purchased a 2013 Hyundai Sonata, upgrading from my old paid-for 2006 Kia Rio. My insurance went up $12 per month. The Rio was worth less than $1,000, according to the county assessor’s office, due to age and mileage, though I was able to get $1,750 for it at trade-in. Kelley Blue Book lists a fair purchase price of $19,681 for my Sonata, but I was able to get it for about $17,000. Considering, $12 a month is a pretty fair price.


Theft Risk

When determining the likelihood of theft, insurance companies turn to statistics on the frequency of theft for every car on the market. Certain cars stay at the top of highest theft risk lists, causing a higher premium to be in place since the company may have to replace the vehicle altogether.

You can, and should, consider installing anti-theft devices to avoid becoming a victim. Even so, cars that are commonly stolen will always be near the top end of the premium scale. Consider this when shopping for a new or a used car. Google is your friend here, since you can instantly pull up most-stolen lists for the last several years.



Another factor that can contribute is the region where you live. A recent ValuePenguin study centered on the state of Ohio found that larger cities ran 31 percent above the state average for auto insurance while smaller towns clocked in at about 16 percent under. Basically, lower traffic areas breed lower risk.



Yes, a car’s age can determine how cheap or expensive it will be to insure, but that’s definitely not the biggest factor in qualifying for the best rates. Insurance companies still place a lot more emphasis on the driver’s age and record. If you have a history of safe driving and you’re in a low-risk group, then you stand a much better chance of landing an affordable premium regardless of the car’s age, make, model, and theft risk.

By following the rules of the road and avoiding citations, accidents, and claims, you’ll make a much bigger impact on that final premium than anything else.


In Summary

It’s true that the type of car you buy — age, make and model — will be a great contributor in determining your insurance premium. However, before you write off that dream car, remember that it’s only a portion of what the company will consider. Get some quotes before buying and make an informed decision before you drive your new ride off the lot.

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