Do you ever wonder why different cars cost you different
amounts for auto insurance premiums? Why is it that a new Corvette may cost you
$1,600 dollars a month in auto insurance and an older Buick Regal may only cost
you $90 per month? The new car insurance cost versus the old car insurance cost
is a subject that you must review before you buy any car. Review insurance
costs before you buy and you will not get caught in a financial trap.
New cars cost more to insure than old cars for three
reasons. First, an auto theft of a new and exotic car costs much more than the
auto theft of an older and average style car. This is because of the large
value difference of the new car versus old car. For example, a new Chevy
Caprice is much more costly to insure than an older Chevy Caprice. It simply
costs more money to replace a new, expensive car than an older, less expensive
car.
Second, the cost to repair a new car is much more than the
cost to repair an old car. As such, this fact shall also increase your
insurance premium cost for a new car. For example, if a new Chevy Caprice is
damaged in an accident, the auto repair shop will charge you much more money
for repairs than if the subject car were a ten-year old Chevy Caprice. For this
reason, your insurer will charge you much more insurance premiums on a new
vehicle than an older vehicle because of such repair costs.
Third, the style and type of car also shall greatly affect
the cost of automobile insurance premiums that your car
insurance company will charge you. Insurance companies use actuarial
statistic tables which show them the past loss experience on particular styles
and types of cars. They use these tables, to help calculate what premiums to
charge their customers in the future. Statistical tables show these insurance
companies that owners of certain styles and types of cars, such as sports cars,
engage in more risky driving behavior than owners of cars that are of average
type and style.
For example, insurance company statistical tables show that
the insurer has experienced more losses with sports cars than with average
cars. It is because the owner of a Corvette will probably drive such car faster
and riskier than the owner of a Toyota Camry. With such speed and risk also
comes along more losses for the insurance companies. With such risk and loss
increase, the insurance company must then increase their return and charge more
for auto insurance premiums.
Another example of how the type and style of vehicle may
present an insurance company with more risk is the off-road style vehicles such
as the Hummer line of vehicles. These vehicles are designed to perform in the
off-road type environment. They are raised up off the ground more than regular
automobiles for under carriage clearance. Additionally, they also have
four-wheel drive capability.
With such design capabilities, the statistical tables show
that the insurance company has experienced more losses with these types of cars
than regular cars. This is because the owners of such vehicles will engage in
off-road driving which is both risky to the vehicle and driver. In fact, some
insurance companies may bar recovery for such damages, when the owner of the
insured vehicle was damaged while any engaging in risky, off-road driving.
Again, with more risk, the insurance company will increase return and thus auto
insurance premiums. Now that you know that certain styles and types of cars
cost more to insure than others, you have to be smart about what kind of
vehicle you are going to buy.
Rather than take a guess at what you believe a vehicle's
insurance costs are, call your car insurance company and ask your insurance
agent for a free car insurance quote for the exact type of vehicle that you are
interested in buying. You can get a definitive answer to your question of
whether or not you can afford both the car and the insurance premiums required
to cover your car against insured losses.
The time to make such assessment is not after you purchase a
vehicle. At that point in time, it is too late. The time to make such
assessment is way in advance of your purchasing an automobile. You definitely want
to be able to make both car payments as well as insurance premium payments. Get
a free auto insurance quote ahead of time and avoid financial problems.
Source: [http://blogs.rediff.com/carinsurance/2016/07/08/buy-a-car-and-car-insurance/]
