Let\u2019s break down the possible insurance options, possibilities, and risks when buying a new vs. used car to help get the best car insurance<\/a> quote for your bank account.<\/p>\n\n\n\n Being on the fence about whether a new or used car is right for you is normal. That\u2019s why we\u2019re here to help you take a look at all the different factors involved in your decision. One big factor is the cost of car insurance for new vs. used cars. Below, we\u2019ll go over how car insurance companies typically determine insurance rates based on the vehicle\u2019s condition.<\/p>\n\n\n\n There are many advantages of buying new cars over pre-owned cars. Having no mileage, a clean record, and the latest safety features can all 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.<\/p>\n\n\n\n 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. That\u2019s because newer cars are more costly to repair if there\u2019s a claim, especially if they come equipped with the latest sensors and other tech.<\/p>\n\n\n\n Many people believe that buying a used car will translate into cheap<\/a> car insurance rates, but that\u2019s not always the case. If the vehicle has been salvaged in its history, it could affect your car insurance rates.<\/p>\n\n\n\n On top of that, certain factors such as lack of modern safety features or having high mileage can significantly increase your collision coverage premiums. The statistics back this up, as research has shown that drivers behind the wheel of a car that\u2019s 18 or more years old are 71% more likely to die in a car crash<\/a> than in a car that\u2019s only three years old. Insurance companies have taken note of this higher risk and charge you accordingly.<\/p>\n\n\n\n That said, there are times when used cars have cheaper insurance premiums, but we\u2019ll go into that more below.<\/p>\n\n\n\n Another big difference when it comes to insurance coverage for new vs. used cars is the type of coverage. You\u2019ll likely want much different coverage<\/a> on a new car than a used car. Let\u2019s take a look.<\/p>\n\n\n\n A brand-new car is like your baby. You\u2019ll want to do everything you can to keep it in that just-off-the-lot pristine condition. Part of that means having extensive insurance coverage to protect it from any mishaps.<\/p>\n\n\n\n That\u2019s why, with a new car, you\u2019ll likely have both collision and comprehensive coverage. Liability is typically the only required insurance coverage, as it pays for the other person\u2019s damage and medical bills if you cause an accident.<\/p>\n\n\n\n Collision and comprehensive, on the other hand, are optional. That\u2019s because they\u2019re used to cover your car in an accident. That said, 78% of drivers opt for comprehensive coverage<\/a>, while 74% also include collision coverage.<\/p>\n\n\n\n With collision, your policy will pay for repairs to your vehicle if you cause an accident. With comprehensive, your policy pays for damage to your vehicle from an Act of God. Think things like a tree falling on your car or running into a deer on the highway.<\/p>\n\n\n\n Keep in mind that there are times when collision and comprehensive are not optional. 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. That way, you won\u2019t be on the hook for paying for a car that has been totaled.<\/p>\n\n\n Another type of insurance you can add on is gap insurance. 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 paying the balance of the cash value you have on your vehicle and the amount you still owe on your loan.<\/p>\n\n\n\n Let\u2019s use an example. Say you bought a $25,000 car, and then three months later, you\u2019re in a serious accident that totals the vehicle. Because cars depreciate very quickly in the first few months, your insurance company might estimate the value of the car to only be $20,000 now. That means you\u2019d be on the hook for paying the remaining $5,000 to your lender.<\/p>\n\n\n\n Gap insurance would cover this discrepancy, so you don\u2019t have to worry about depreciation in these scenarios. It would provide your lender with the remaining $5,000, so you\u2019re not paying out of pocket for a car that no longer exists.<\/p>\n\n\n\n Just like with a new car, you\u2019ll also need liability insurance for your used car. It\u2019s important to make sure you have at least your state\u2019s minimum coverage, especially since your chances of getting in an accident are higher in a used car.<\/p>\n\n\n\n However, you may be less likely to choose comprehensive coverage and collision coverage. Since these policies for your car equate to the maximum value of your vehicle, getting those policies might not be worth your while for a used car.<\/p>\n\n\n\n For example, if you only pay $3,000 for your used car, it might not be worth the increase in premium cost for collision and comprehensive coverage. If you\u2019re in a fender bender and have $4,000 worth of damages, your policy won\u2019t cover repairs because they exceed the value of the car.<\/p>\n\n\n\n That\u2019s probably why you see a lot of older cars with dents and scratches on the road. These drivers likely don\u2019t have insurance coverage to fix these issues because they would end up costing more than the car is actually worth.<\/p>\n\n\n\n Depending on your state\u2019s laws, you may only be required to get liability insurance for pre-owned cars and opt-out of other coverage. However, it\u2019s best to check \u2014 perhaps with a Freeway Insurance expert<\/a> \u2014 to know the exact coverage level minimums in your state.<\/p>\n\n\n\n The type of car you end up buying can play a big role in the cost of your car insurance. As an example, used car insurance costs for a Tesla are still going to be more expensive than buying a new commuter sedan. Let\u2019s take a look at new and used car insurance rates by model to get a better idea of how the type of car affects your premiums.<\/p>\n\n\n\n You\u2019ll notice there are a lot of minivans, SUVs, and sedans on this list. They\u2019re actually three of the cheapest car types to insure<\/a>, so they\u2019re typically a good bet if you\u2019re looking for the lowest price new or used car insurance.<\/p>\n\n\n\n When buying a new car<\/a>, it\u2019s a good idea to check the average insurance rating for the model you\u2019re considering. Some makes with typically low rates include Honda, Toyota, GMC, Chevrolet, and more. That\u2019s because these cars are known for their affordability and reliability. They\u2019re not a foreign or luxury company, as well.<\/p>\n\n\n\n Let\u2019s take a look at 10 of the most affordable new cars to insure annually based on data we\u2019ve collected<\/a>:<\/p>\n\n\n\n In many cases, cars that are seen as reliable, safe, and a low crash risk when new typically maintain that performance as they age.<\/p>\n\n\n\n That\u2019s why you\u2019ll notice that many of the cheapest used cars to insure are older models with solid bodies that can hold their own in a crash. Here\u2019s a list of the cheapest annual used car insurance rates for ten popular old models:<\/p>\n\n\n\n No matter what your answer is to the \u201cShould I buy a new or used car?\u201d question, here are some general tips that can help you obtain a better premium for your budget:<\/p>\n\n\n\n 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<\/a> online or call one of our representatives at 800-777-5620<\/a> to help you find the best coverage you can afford.<\/p>\n\n\n\nCar Insurance for New vs. Used Cars: The Basics<\/a><\/h2>\n\n\n\n
Determining New Car Insurance Rates<\/a><\/h3>\n\n\n\n
Determining Used Car Insurance Rates<\/a><\/h3>\n\n\n\n
Car Insurance for New vs. Used Cars: Differences in Types of Coverage<\/a><\/h2>\n\n\n\n
Typical Insurance Coverage for a New Car<\/a><\/h3>\n\n\n\n
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<\/figure><\/div>\n\n\nTypical Insurance Coverage for a Used Car<\/a><\/h3>\n\n\n\n
Car Insurance for New vs. Used Cars: Type of Car<\/a><\/h2>\n\n\n\n
The Cheapest New Cars to Insure<\/a><\/h3>\n\n\n\n
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The Cheapest Used Cars to Insure<\/a><\/h3>\n\n\n\n
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Tips for Buying New and Used Cars<\/a><\/h2>\n\n\n\n
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Affordable Car Insurance Rates for Your New or Used Car<\/a><\/h2>\n\n\n\n