Buying a New Vs. Used Vehicle

Buying a New Vs. Used Vehicle

When deciding between buying a new vs. used vehicle, there’s more to consider than just which dealership offers the best prices and warranties. You also need to consider insurance costs. Insurance can make a big impact on the total amount of money that you’re left with each month to cover your other bills and expenses. So, before you decide between buying a new vs. used vehicle, find out the difference between insuring each to help you make a better-informed decision.

What Does the Insurance Company Consider?

Your insurance company will take a number of things into account when producing your premium. For one, they will look at the replacement cost of the parts of the vehicle and the entire vehicle itself. Considering a new car is more expensive to purchase and replace, it’s going to be more costly to insure. The insurance company will also consider how likely your car is to be stolen and how many claims it has previously had. Even if it’s an older model, if there are more claims on file, it’s going to cost more to insure.  The safety features are also taken into consideration. New cars are equipped with better safety features, which can also lower your insurance costs. 

New Car Vs. Used Car

When comparing apples-to-apples, it’s going to cost you more to insure a new car in comparison to a used one. However, you also need to consider the condition of the car. New vehicles often don’t need to be repaired in the first five years (unless an unexpected accident occurs). Whereas a used vehicle might need significant work and maintenance to keep it on the road. Even though you may be able to avoid higher insurance costs, you could pay more in repairs in the end, so it’s important to weigh both factors before deciding.

What Else You Need to Consider

No two policies are exactly alike. Every insurance provider offers their own set of coverages and rates based on a multitude of factors. The good news is, there are professionals out there who can do all the shopping around for you to find the best rates and policies based on what you can afford, your driving record, and the type of car you plan to purchase. These people are called insurance brokers, and their job is to find a policy that works for you – not the insurance company. 

Before you purchase a vehicle, whether new or used, it’s important to find out how much it’s going to cost you to insure. Insurance is one factor that should be taken seriously, as it can highly impact the amount of money you’re left with to cover other things like the maintenance costs and repairs. To find the best rates for your vehicles, contact us at MLS Insurance. We’ll provide you with a free quote and the advice you need to help you save more on insurance.

More articles...

Busting out the Oldsmobile? Get Antique Vehicle Insurance First
Moving to Canada? The Ultimate Home Insurance Buying Guide
All About RV Insurance in Alexandria, Ontario, Canada