Does Auto Insurance Cost More for Late Model Vehicles?

Does a brand-new car automatically mean higher than normal auto insurance costs? Some people have this belief, but it's not necessarily true. The cost of insuring a car depends on several factors. Except in cases of classic cars, the model year of the vehicle typically has very little to do with the cost of your insurance premiums.

Manufacturers produce millions of new cars each year, and dealers sell those new cars by the millions. The model year of the car holds very little weight when it comes to insurance premiums.

What matters more to an insurance company is the type of car you plan to own more than the fact that it's a new car in general. When it comes to car types, in this case, the insurance company will look at:

• Is it the type of car people may want to steal or vandalize?
• Is it the type of car that comes with inherent risks?
• Is it the type of car that's extravagantly more expensive than average?

Note that none of these things have anything to do with model year and can apply to any type of car, old or new. Read on to learn which types of car can affect your insurance rates.

The Types of Cars Thieves Want
Brand new cars aren't typically high on the list for thieves. Newer cars often come with newer security features that many thieves would rather not have to deal with.

Thieves like established models that have a high market penetration. These are the cars people already have a full understanding of. These are also the cars that are easiest to break down into parts and sell.

Any list of the most stolen cars will include basic models from years past, not brand-new models. Some auto insurance companies may have higher premiums for cars that frequently make these lists.

The Types of Cars That Come With Risks
Some cars come with inherent risks that insurance companies must take into consideration. For example, some manufacturers create models specifically to have very high acceleration and speeds. These cars can represent a danger to the driver and everyone else, especially if it's a younger driver or someone who doesn't have practice with sports cars.

In addition, some base models of cars can lack some of the latest security features, which can lead to higher insurance premiums as well. Once again, these considerations apply to all cars, not just new ones.

The Types of Cars That Come With High Price Tags
Expensive cars, like any expensive item, will come with both higher premiums as well as additional insurance concerns. A new luxury car will likely have higher insurance costs than a new, reasonably priced sedan. Exotic or expensive cars will typically have higher rates because repairs for them cost more and payouts will cost the insurer far more money.

While car theft doesn't tend to focus on luxury vehicles, some models do have a higher rate of theft than others. If the expensive vehicle is a sports car, then the insurer must consider if the driver will use it as such. In this sense, a luxury vehicle,especially an exotic or sports vehicle,can come with all the risks an insurance company might worry about in one package.

You don't have to worry that your new car will come with high premiums just because it's new. Although, if you'retaking out a car loan, your lender may need you to add on extra insurance during the length of your loan term. If you're picking up something old or new,contact Coast Comp Insurance Agency for an auto insurance quote you can work with.