Why do older cars usually have cheaper insurance than newer cars?

No matter which way you look at it, the type of car you drive will definitely have an effect on how much you pay for insurance.

According to AIA vice president and general counsel, the make and model of the car, together with its performance ratings, will determine the amount of your premiums. The value of the car is another factor.

Taking these things into consideration, we can go two ways regarding the cost of insurance. For newer cars, you would definitely have better safety features such as anti-theft mechanisms, air bags, and the like. That should mean that the premiums are lower, right? Then again, with newer cars, the value of the vehicle is also considerably higher than that of older cars. It then follows that the premiums might be considerably higher. This is one reason behind the fact that older cars can have cheaper insurance as compared to newer ones. Think about it this way – a new Corvette would definitely be more expensive than your old Chevy family car. Why wouldn’t the insurance company charge more for the newer and more expensive car?

More so, a car type’s record regarding crashes and damage inflicted also enters the equation. Based on statistics, sports cars and SUVs have been shown to be involved in the most crashes and to inflict the most damage to other vehicles during a collision or car crash. As such, cars that fall under these two categories would definitely have higher liability premiums.

Another very important factor that can lower the price of insurance for older cars is the type of coverage. In some cases, it would be more cost efficient for the owner of an older car to just replace it in case of an accident. Perhaps the repairs would reach an exorbitant amount, thus making it more sensible to scrap the older car and get a new one. In this case, the only coverage that would be needed is third party coverage. As such, the cost of the car insurance would be significantly lower than if other types of coverage were to be taken out as well.

Of course, the cost of your car insurance does not totally depend on your car’s make and model. More than that, it is your driving skills and habits that would dictate how you fare on the road. Whether you have an old car or a new car, you should always practice safe driving.