Are new or used cars more expensive to insure?
Asked by: Zelda Dibbert | Last update: January 7, 2026Score: 5/5 (58 votes)
Is it more expensive to insure a new car or a used car?
New cars normally have a higher market value compared to used cars, which often results in higher insurance costs. Insurers must account for the potential payout in case of a total loss, making it more expensive to insure a higher-valued vehicle.
Is it cheaper to insure an older or newer car?
The price of car insurance generally does go down as a car gets older. This is because older cars are typically worth less than new cars, so the cost to repair or replace them in the event of an accident is lower.
Is it cheaper to buy a used vehicle or a new vehicle?
Financially speaking, buying a pre-owned vehicle is practically cheaper than buying a new one. However, there are a number of disadvantages in buying second hand cars. You won't have as much choice when it comes to colors, styles, and options.
Does a new car raise your insurance?
Usually, getting a new car will increase your rate because it'll be worth more than your old car. Note that other factors may impact your car insurance rate if you're starting a brand-new auto insurance policy. But even if your rate increases, you may be eligible for a few car insurance discounts.
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Why did my insurance go up when I bought a new car?
When insuring a car, a major factor that affects cost is the vehicle's value. New cars generally have higher values so insurers consider this when determining premiums. Additionally, new cars can experience fast depreciation.
What is 1 advantage of buying a used car over a new car?
New cars lose value the moment you drive off the lot—and they continue to depreciate rapidly, often losing up to 40% of their value in the first year. In contrast, used cars depreciate at a much slower rate after their initial year, making them a smarter and more stable investment.
Do used cars depreciate faster than new cars?
A new car will typically depreciate much faster than a used car. But staying on top of your car's maintenance needs can preserve its value for longer.
What mileage is good for a used car?
There's no rule to how many miles on a used car is too much, but by attempting to stick to the 12,000 miles per year rule is a great place to start. Find out how old the car is, multiple the number of years by 12,000, and if the number on the odometer is significantly higher than that, some concern might be warranted.
At what point is full coverage not worth it?
Paying for comprehensive and collision — the coverages that many people mean when they say "full coverage" — may not be worth it if your car's value is minimal and your policy includes a high deductible. Usually, you have to have comprehensive and collision on a financed car because most lenders require it.
At what age is car insurance most expensive?
The Insurance Institute for Highway Safety reports that teen drivers are four times more likely to get into a car crash than drivers 20 and older. As a result, car insurance companies view young drivers as the most risky to insure. Drivers ages 16 to 24 tend to face the highest premiums compared to other age groups.
Do I need full coverage on a 10 year old car?
It's usually worth dropping full coverage on an older car if its value is less than a few thousand dollars, as long as there's no loan on it. The more your car depreciates, the less you'll get from the insurance company after an accident or theft.
Why are newer cars more expensive to insure?
Due to their desirability and higher resale value, new cars can attract more attention from thieves. The increased risk of theft and vandalism contributes to higher insurance costs. Full coverage insurance is often recommended for new cars with higher theft and vandalism risks.
How much does car insurance go up with a used car?
However, car insurance rates depend less on whether the car is used or new and more on the details of the vehicle and your policy, including the car's make and model, your location, and the amount of coverage that you carry. For the most part, there's no difference between insurance for used and new cars.
Is an old car cheaper to insure?
In general, auto insurance for older cars may be cheaper than insuring newer vehicles of the same make and model if the used car is cheaper to repair or replace. A car depreciates in value over time, which lowers the maximum amount an insurance company would have to pay in the event of an accident.
What age is best to buy a used car?
The optimum age range for purchasing a used car is commonly recognized as falling between 2 to 5 years old. Within this timeframe, a car has traversed the steepest part of its depreciation curve while still maintaining relatively new and well-maintained conditions.
Are used cars more expensive to insure than new cars?
Used cars depreciate at a lower rate than new cars, which means that their value remains more stable over time. Since the value of a used car is lower than that of a new vehicle, the used car insurance premiums are generally lower from the outset and insurance costs generally decrease over time.
At what age do cars lose the most value?
The first year faces the most significant depreciation hit to the car's market value, with most vehicles losing about 20% or more of their original value. The loss continues to decline from there. Cars often shed about 60% of their original purchase price within the first five years.
What are three disadvantages of buying a new car?
- The price of a new car is typically much more expensive than if you bought the vehicle used.
- Be prepared to pay much more in sales tax.
- New vehicles are said to lose up to 20 percent of their value as soon as you drive off the lot.
Why is it smarter to buy a used car?
Purchasing a used car is a financially sound decision that offers numerous benefits, including savings, lower insurance costs, and a wide selection of vehicles. For those looking to make a smart investment, a used car is often the way to go.
Is it easier to finance a new or used car with bad credit?
New Car vs. Used Car. You're more likely to get financed for a used car than a new one if you're a bad credit borrower, simply because you're likely to get approved for a payment that fits better with used vehicle prices. Financing a new car almost always costs more than a used one.
Which car is least expensive to insure?
The Honda CR-V, Mazda CX-5, Jeep Wrangler and Subaru Outback are the cheapest cars to insure. All three have full coverage rates under $250 per month, on average.
What color vehicles have the highest insurance?
Color has no impact on your insurance price.