Different cars cost differently when it comes to paying insurance premiums? Have you ever wondered the reasons behind such a difference? Always keep in mind that new cars always cost higher when compared to their older counterparts. There are a number of reasons to justify this scenario.
1. Luxury cars tend to have higher insurance premiums
First of all, auto theft of some brand new exotic car model will definitely have a higher replacement cost when compared to the replacements in an average-styled and older vehicle. This is due to the huge value difference between the old and the new cars. In simple words, it costs more when replacing parts of a brand new luxury vehicle in comparison to the older and the less expensive car models.
2. The repairing cost for luxury and new vehicles are higher
The repairing cost for newer vehicles is always higher when compared to older models. As a result, the premium rates increase when insuring a brand new vehicle. Say, for example, if your new Honda City gets damaged due to some accident, the auto repair shop is going to charge you more money for the repairing job in comparison to a 10 year old Honda City vehicle. This is the reason why your insurer will charge you higher insurance premiums on new vehicles than older vehicles.
3. The type of car defines the insurance premiums
The style and type of a car definitely plays a big part in fixing the insurance premium rates. A lot of insurance companies use actuarial statistic tables that show them the past loss experiences associated with different styles and vehicle types. Using these tables, they detect and calculate the premiums that can be charged to the customers in the near future.
Take a Look Online
You can look for discount car insurance options available online and find statistical tables from different insurance providers available for the consumers to get a clear idea about the insurance premium rates associated with different vehicles. For instance, sports cars are engaged in high-risk driving. This is why, sports cars are more prone to accidents and damages. As a result, insurance companies ask for high-premiums when compared to average type vehicles. If you follow the statistical tables of any insurance company available online, you can figure out that the insurer may have suffered higher loss with sports cars in comparison to average vehicles. After all, a person driving Corvette will definitely drive it at a higher speed when compared to a person driving a Toyota Camry. So, naturally, faster speed vehicles associate a great deal of risk with them. As a result, the insurance companies start increasing their return and charge high-premiums for such vehicles.
When you are planning to purchase a vehicle, focusing on insurance premium rates is necessary and important. Never go for a luxury make and the brand name. Yes, people have dreams of driving a Mercedes or BMW. But, then, you also need to consider the other aspects like, the expenses.
There are plenty of car insurance dealers available. But you need to look for the best options through a proper channel. Never forget to search online to learn about the different automobile insurance policies and the premium rates associated with them. You must consider looking for multiple options prior to taking a decision. Take quotes from different insurers and study them carefully to figure out what are the benefits you will enjoy while availing services from them.
Read More: 4 Best Insurance Jobs In India