Does insuring a brand-new car make you broke?
There is a saying in the car insurance world: “It takes more money to insure brand-new cars”.
Sadly, this is just a saying because it is totally fictitious. In fact, insuring a new car is cheaper than you think, and here are some reasons why.
The brand and model
Real estate agents believe in a famous mantra: “location, location, location.” For auto insurance agents, it’s “brand and model, brand and model, brand and model…”
The brand and model of a car are more important than its calendar year. It doesn’t matter if you drive a new model or an old car. Sports cars have a huge difference if compared with family sedans or vans.
A family van might be bigger than a sports car, but there is a much bigger difference between these two cars: particularly, the specific drivers they attract.
Cost of insurance depends on who drives or exhibits the owner’s capacity. For example, John drives an old version of a super-fast sports Porsche car while Jim drives a brand-new Toyota Sienna.
John could pay higher rates on car insurance compared to Jim. Moreover, if there are some enhancements to the appearance and/or performance of the car, John’s car insurance rate would also increase.
Susceptibility to car thieves
Car insurance companies base the insurance rate depending on number of times a car is stolen. This may sound impossible but most brand-new car models don’t attract car thieves.
Thieves look for models whose parts are still original or haven’t changed much through the years.
They are most likely to remove the parts and sell them by piece. Old cars have rare parts that are hard to find which can be sold at impressively high prices.
For thieves, the more vintage, the better – just like the early-90s Camry and mid-90s Civic and Accord.
The higher the risk is for a car to be stolen, the higher chances are that insurance companies will increase the price of car insurance.