Is It Cheaper To Insure a New Car Or a Used Car?
Find Your Ford
Value Your Trade
New Vehicle Specials
New Cars vs. Used Cars: Insurance Costs Revealed
Dreaming of a shiny new car? Or is a pre-loved vehicle more your speed? One common question is: Is it cheaper to insure a new car or a used car? The answer isn’t always straightforward. At Portsmouth Ford, we believe in transparency. That’s why we’re breaking down the factors that influence insurance costs for new and used cars. Let us help you make an informed decision. Discover the truth about new vs. used car insurance and find your perfect vehicle at Portsmouth Ford, where you can always depend on our No Dealer Fees Guaranteed promise.
Insurance Requirements: What You Need to Know
Before we answer the question: Is it cheaper to insure a new car or a used car? We must first tackle the basics. If you’re financing a new car, your lender will typically require comprehensive and collision coverage. This type of policy often costs more than liability-only coverage, which might be sufficient for a used vehicle.
Is A New Car Cheaper to Insure?
The age of your car is just one factor influencing insurance costs. While it’s true that older vehicles often come with lower premiums due to depreciation, meaning the car’s value decreases over time, other elements can significantly impact your insurance rate. Newer cars, on the other hand, often come equipped with advanced safety features like anti-lock brakes, collision avoidance systems, and lane departure warnings, which can qualify you for substantial discounts on your insurance premium. Ultimately, determining whether insuring a new or used car will be cheaper depends on a variety of factors beyond the vehicle’s age. Your driving history, the specific coverage you choose, and the insurance company you select all play a crucial role in determining your final premium. To find the best possible rate, it’s essential to compare quotes from multiple insurers. This allows you to weigh your options and select the policy that best fits your needs and budget.
Your Car Insurance Options
To determine whether it is cheaper to insure a new car or a used car, you have to understand your options. Car insurance offers a range of protections for you and your vehicle. Let’s break down the key options.
Essential Coverages
Liability Insurance: This is typically required by law and covers damages you cause to others in an accident. It includes bodily injury liability (for injuries to others) and property damage liability (for damage to others’ property).
Collision and Comprehensive Coverage: This coverage protects your vehicle. Collision covers damage from accidents, while comprehensive covers losses from theft, vandalism, or natural disasters.
Full Coverage: Full Coverage is a common term for a policy that combines several types of insurance, including liability, comprehensive, and collision coverage. It’s important to note that “full coverage” doesn’t actually exist as a specific insurance policy; it’s simply a way to describe a package of coverages.
Personal Protection Coverage
Personal Injury Protection (PIP): Often called no-fault insurance, PIP covers medical bills, lost wages, and other expenses for you and your passengers after an accident, regardless of who caused it.
Medical Payments Coverage (MedPay): MedPay is similar to PIP but typically has lower limits and is optional in most states. This covers certain medical expenses such as hospital bills and x-rays.
What Affects Your Insurance Rates?
The price you pay for car insurance is influenced by a variety of factors beyond whether you drive a new or used vehicle. Your driving record, location, age, and the type of coverage you choose significantly impact your premium. Even your car’s specific features, like safety technology or engine size, can play a role. Grasping these key factors can help you make informed decisions when buying a car and determining whether it is cheaper to insure a new car or a used car. For example, while newer cars may depreciate faster, potentially lowering insurance costs over time, they often come with advanced technology that can increase repair costs. Let’s break down these factors in more detail to help you understand your insurance bill:
- Driving Record: Accidents, traffic violations, and DUIs significantly increase your rates.
- Age and Experience: Younger, less experienced drivers typically pay higher premiums.
- Credit Score: Your credit score status and history can influence your insurance premium, though this varies by state.
- Car Make and Model: Some vehicles are more expensive to insure due to factors such as theft rates, repair costs, or safety ratings.
- Vehicle Age: Older cars are generally cheaper to insure due to depreciation.
- Vehicle Value: More expensive vehicles typically have higher insurance premiums.
- Safety Features: Cars with advanced safety features like lane departure warnings and pedestrian detection often qualify for discounts.
- Location: Where you live affects your rates due to factors like crime rates, accident statistics, and weather conditions.
- Annual Mileage: Drivers with lower annual mileage may qualify for discounts.
- Usage-Based Insurance: Some insurers offer programs that track your driving habits to determine rates.
Shop Portsmouth Ford
Although we have no control over individual insurance costs, we can guarantee that at Portsmouth Ford, there will be zero hidden dealer fees on your vehicle purchase. Determining whether it is cheaper to insure a new car or a used car isn’t always straightforward. While newer vehicles may depreciate faster, potentially lowering insurance costs over time, they often come equipped with advanced safety features that could earn you discounts. At Portsmouth Ford, we’re here to help you find the perfect vehicle to fit your needs and budget. Our finance team can assist with securing an affordable auto loan, whether you choose new or used. Visit us today to explore your options!