Car Insurance Rates: New vs. Used Car

Should I buy a new or used car?” This is the primary question a person asks when they need to purchase a new vehicle. Buying new or used is dependent on a lot of personal financial factors, including car insurance rates. Depending on your income and credit, you might not get cheap car insurance based on the vehicle’s age, mileage, and usage. Let’s break down the possible insurance options, possibilities, and risks when buying a new vs. used car, to help get the best car insurance quote for your bank account.

Car Insurance for New Cars

There are many advantages of buy new cars over pre-owned cars. No mileage, clean record, and newer safety features can help lower your premiums. New cars tend to need less maintenance and have more accessible parts in case they need to be replaced using comprehensive coverage. With that said, a new car is an expensive car and the more expensive the car, the higher your overall car insurance rates will be.

If you borrow money to purchase a new car from a lender or opt for a lease, you may want to investigate gap insurance for your new ride. Your premium price will rise, but gap coverage will protect you from needing to pay the balance of the cash value that you have on your vehicle and the amount you still owe on your loan. Also, if you buy a new car through a loan or a lease, your new car may be required to have collision coverage and/or comprehensive coverage so the lenders can pay for the damages if you cause an accident.

Car Insurance for Pre-Owned Cars

Many people believe that buying a used car will translate into cheap car insurance rates, but that’s not always the case. If the car has been salvaged in its history, it could affect your car insurance rates. If the car you buy has a higher chance of getting stolen, it doesn’t matter if it is new or used. According to our most current statistics, even some models from the mid-1990s have a greater chance of getting stolen than their modern counterparts.

On top of that, certain factors such as lack of modern safety features or having high mileage can significantly increase your collision coverage premiums. Since the comprehensive coverage and collision coverage for your car equates to the maximum value of your vehicle, getting those policies might not be worth your while for a used car. Depending on your state’s laws, you may only be required to get liability insurance for pre-owned cars and opt out on other coverage.

Tips for New and Used Cars

No matter what your answer is to the “Should I buy a new or used car?” question, here are some overall tips that can help you obtain a better premium for your budget:

  • Before you buy a car, new or used, get a free car insurance quote just to know what kind of price to expect on a premium.
  • Thoroughly investigate the make, model, and year of the car you wish to buy in order to see what features may affect the price of your premium. Look online to see which make/model cars are the most stolen, have outdated safety features, or other factors that could raise the price your premium.
  • When you do buy a car, check its Blue Book value each year to see its current price on the market. You can talk to your insurance agent and possibly get a lower price on your premium depending on the updated value of your vehicle.

If you would like to get a car insurance quote before you buy your next automobile, Freeway Insurance can help. Get a free car insurance quote online or call one of our representatives at 800-777-5620 to help you find the best coverage you can afford.