Buying your first new car is quite an achievement. It's a true indicator that you've firmly made it into the middle class. However, there is one downside to trading in your old rust bucket for a shiny new car: more expensive
, and if you haven't owned a brand new car before, you may be in for a sticker shock. Don’t worry though, because we can guide you through all the basics of how a new car will influence your insurance costs.
Why do new cars have higher insurance costs?
No matter the asset, the higher its value will result in a higher insurance cost. This includes cars.
Should your new car need repairs or replacement after an accident, these costs will be higher for the insurance company. To offset these expenses, car insurance companies will charge new cars higher insurance rates.
, more expensive cars generally result in higher insurance costs. Keep this in mind when you are shopping for a new car. Most shoppers only calculate a car's total expense in monthly payments and expected gas costs. Many tend to neglect the cost of car insurance.
Other than a car's monetary value, several other factors will influence car insurance costs, such as vehicle type. Sports cars, for example, are known to have much higher insurance costs than other vehicle types. This is because sports cars can go much faster, and thus cause more expensive damage should an accident occur.
The same logic applies to heavy vehicles like SUVs or trucks.
Their above-average weight can cause more damage than lighter sedans. After all, would you rather be involved in an accident with a giant truck or small coupe? Since heavier vehicles can cause more damage and harm, they have higher car insurance rates.
Additionally, cars that are designed and marketed for off-roading may have increased insurance costs.
In some scenarios, off-roading vehicles can be perceived as more likely to be involved in an accident. If a specific car model is more likely to be on the road during snowfall or unsafe weather, insurers may be inclined to increase rates to adjust for the increased risk.
The good news is that there are a lot of new car features that can reduce your car insurance costs.
One of the best examples is anti-theft features. If your new car has GPS tracking, an alarm, or an ignition shut-off switch, then insurance companies are likely to give you a discount. The less likely a car is to be stolen, the cheaper the insurance will be.
Safety features may also reduce insurance costs, but there are some caveats. As most cutting-edge safety features rely on expensive technology, this tends to increase the cost of parts replacement. In turn, this can increase insurance costs.
How to get the best deal on car insurance
One of the best ways to save on car insurance is by shopping around and comparing prices with different companies.
can help. A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you're always getting the coverage you want at the best price.
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