There is finally enough money saved in your account to purchase a new car, hoorah! No longer having to rely on public transport or the kindness of friends to get from point A to point B will be a huge relief. But before you set out to get that car, be it new or used, know that the cost of your car insurance premium will be directly affected. To find the best auto insurance rates for used and new vehicles in town, keep reading below.
The New vs. Used Car
It is widely assumed that new vehicles are more expensive to insure. In part, this is true. While most insurance agencies do offer premium fee cuts for cars with high safety-ratings, that’s really the only immediate break you’ll find as you try to insure your new car.
Something to consider before buying a brand new car instead of a used one is whether or not you will be leasing the car. When you are ready to invest in an auto insurance plan you want to have a set budget in place. Having a budget will save you from overspending and will ensure that you have enough funds to make your premium payment at the end of the month. A lot of motorists don’t quite understand how leasing an automobile works. When you lease a new car, the car doesn’t belong to you, it belongs to the bank. After leasing a car, the bank requires that you have a certain type of coverage. As there is not a universal auto insurance fee. You might have $600 set aside in your budget and believe that you can make a payment within that number. Daily Finance advises that you consider the insurance cost adjustment that will take place. This adjustment could quickly put you over budget, ruining all of your financial planning.
This is why it’s recommended that you buy a used car first, as more often than not you will be able to buy the vehicle outright or take out a small loan to make up the difference. Unlike taking out a lease, having a loan on your car still makes it yours; the bank does not have the authority to tell how to insure your auto.
As you set out to buy a used car, keep in mind that vehicles 10-years-old or younger are ideal. The Department of Motor Vehicles (DMV) reports that cars older than 10 years are more likely to be stolen. This is because older vehicles lack today’s safety features, such as GPS tracking systems and anti-theft devices. And with cars older than 15 years, you risk the chance of not being able to make repairs due to parts no longer being produced by the manufacturer.
Back by Popular Demand…
According to Santander Consumer USA, there are four popular vehicle makes that used car motorists swear by:
In our own findings here at CoverHound we’ve learned what the annual premium cost is for each of the above makes from 2007 to 2015:
As noted by the table, used cars are less expensive to insure, while still being equipped with some of the same bells and whistles as the newer models. Owning a car is a big responsibility. When you’re buying a new car think about all of the costs that come with it: insurance, maintenance and payments. Of course, a key part to executing this plan is using CoverHound’s online insurance tool to compare premium rates for used vehicles. See how much you can save today!