Is It Easier to Get Insurance on a New or Used Car?

It is typically less expensive to insure a used car than a new one. Used cars not only cost less to buy, but also cost insurance companies less to insure them. However, there are certainly exceptions as a new economical car costs less to insure than a used high-end sports car. Take the time to compare multiple quotes before deciding upon a specific vehicle purchase. Understand the pros and cons associated with both new and used vehicles and choose an affordable insurance policy that best protects you, your family, and your vehicle.

Advantages and disadvantages of new cars

Given the choice, most people prefer to buy new. This is true not only regarding automobiles, but also with other major purchases including electronics. New items, specifically new cars, have the advantage of current technology such as improved vehicle safety features and engines that are more efficient. However, buying new comes with more than just a high price tag. For example, new cars have the burden of depreciation. The first three years of owning a new car are the years where the vehicle looses most of its value. Depreciation begins as soon as you purchase the vehicle, but does slow eventually slow down. This is why it is important to pay a large down payment to prevent becoming upside down (owing more than the vehicle's current value).

Advantages and disadvantages of used cars

Compared with leasing or purchasing a new vehicle, buying a used car is the smartest financial decision. This is because used cars are less expensive, and because the majority of the depreciation has occurred. Insuring a used car is also less expensive than insuring a new one. This is due to two major reasons. The first is because it is less expensive to repair and replace a used car than a new one. The second is because new cars are required to carry additional insurance coverage. Stolen and vandalized more often than used cars, new cars must typically carry comprehensive insurance. Make sure you are fully aware of any insurance requirements before purchasing either a new or a used vehicle.

Certified pre-owned

One-way consumers are finding to bridge the gap between new and used cars is by purchasing certified pre-owned vehicles. While technically these cars are used, they undergo extensive testing and carry more guarantees than traditional used cars do. Check with your potential insurance provider to determine if any additional discounts are available for certified pre-owned vehicles.

Driver's history

A driver's history is one of the main factors that determine the cost of insurance premiums. If a driver was involved in multiple accidents, has had a history of DUIs (driving under the influence of drugs or alcohol), or has had multiple traffic violations, they have to pay more for insurance than a driver with a history of safe driving does.

Location

Drivers who live in large, metropolitan areas typically pay more for insurance than drivers living in rural areas do. The city driver has more potential for accidents, theft, and vandalism and therefore pays more for their insurance premiums.

Theft

Frequency of theft is another exception where specific used cars can cost more to insure than new models. Each year, the National Insurance Crime Bureau compiles a list of the nation's most frequently stolen automobiles. As of 2006, the most commonly stolen cars and trucks were:

1.    1995 Honda Civic
2.    1991 Honda Accord
3.    1989 Toyota Camry
4.    1997 Ford F-150 Series Pickup
5.    2005 Dodge Ram Pickup
6.    1994 Chevrolet C/K 1500 Pickup
7.    1994 Nissan Sentra
8.    1994 Dodge Caravan
9.    1994 Saturn SL
10.   1990 Acura Integra

Accessories

Adding accessories to your vehicle is another viable way to save on car insurance regardless if the vehicle is new or used. For example, adding a car alarm system to your car can reduce your annual premium. Other accessories include installing anti-lock brakes and theft recovery devices. Ask your insurance professional for a complete list of approved accessories.

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