Buying a new car isn’t in everyone’s budget. Not only is it expensive, but they typically lose value as soon as you take ownership. Purchasing a second hand or an older car can be an affordable way to save money. Often people may wonder how much insurance they need for an old car and if they are cheaper to insure as insurance is compulsory. If caught driving without insurance, enforcers of the law can hand out some pretty hefty fines as well as revoke licenses. So, whether you’re driving in NYC or Oakdale, MN, insurance is a must. Below, we will take a look at the factors that you need to be aware of.
Factors Affecting Insurance Costs
Don’t make the mistake of assuming that insurance costs will always be lower for older cars. Insurance companies consider a number of factors when calculating premiums, such as your driving record, previous accident history and how many claims you have submitted in the past.
Typically, these factors along with traffic violations such as speeding can cause your premiums to be higher than someone with a perfect driving record – no matter what type of car you are driving.
Some of the other factors that insurance companies consider are the age and gender of the driver, marital status and the amount the vehicle is being driven. Typically, young males have the higher insurance rates, while middle aged individuals that do not have long commutes will have the lower rates, regardless of whether or not the vehicle is a new or older car.
Types of Insurance Coverage
Another factor that plays a role in how much your premiums will cost is the type of insurance that you select. For example, if you have a classic or antique car you will most likely want to be protected for the full value of having to replace the car and this may increase your insurance premium based on the appraised value of the vehicle.
However, if you purchased a fifteen-year-old sedan for $1000, you may decide that you do not need the replacement value covered. Also, if you have an older car with modifications that have increased the car’s value or performance, this could possibly increase your insurance premium as well. Typically, cosmetic modifications, such as paint jobs, would be unlikely to affect your premium. Although, if the modifications help prevent theft or are safety related, you could actually receive a discount that could lower your premium.
To find out exactly what your options are when it comes to insuring an older car, it’s best to get in touch with your insurance broker. They will be able to go over the various types of coverage available and find you the lowest possible rate.
About the Author
Kristopher Parks graduated with a Bachelor’s in finance at the University of Calgary. He has over 10 years of experience in the insurance industry as an agent/broker. He enjoys spending his free time with his family by going to hockey games and camping. If you’d like to contact him, you can do so at his LinkedIn.
