While you visit dealerships to try and find your next vehicle, it’s important to consider how costs for new car vs. used car insurance compare. As the value of a vehicle goes down, the insurance for it usually does too. So, a used car will generally cost less to insure than a new model. Read more to get Alexander Insurance Agency’s breakdown of how the age of your vehicle can affect your rate.

How do Costs Vary by Provider?

The Quadrant Information Services group claimed that most drivers with very good records pay about $168 per month to have full coverage on a brand new vehicle. They also found that drivers pay on average about $150 per month to secure full coverage on used vehicles from 2018. These statistics were recorded based on married male drivers aged 35 years old. This data shows that annual car insurance costs will go down by an average of $221 total during the first four years a vehicle is driven.

Factoring in Make and Model:

The price of your insurance will vary depending on not just the age of your car, but also its make and model. As an example, if you have  Progressive, a Ram Pickup will cost more to insure than crossover SUVs like a Honda CR-V. The Toyota Rav-4 is one of the most budget-friendly vehicles out there, with other dependable staples such as the Toyota Camry costing less than the high-tech and eco-conscious Tesla Model 3. No matter the make or model, insurance companies pay less and less for a total loss as time goes by and the vehicle depreciates.

How Coverage Level Affects Monthly Cost:

Getting full coverage on your vehicle gets you peace of mind that you would be covered in case of an accident or theft, especially if you get the highest coverage limits for liability. The downside is that Full coverage will cost you hundreds more annually than Missouri’s bare minimum liability requirements. If you choose to finance a car with a loan, you will be required to get full coverage. One good rule of thumb is that if your vehicle is worth more than $5000 or you would find yourself unable to pay for repairs after an accident, full coverage is the best option. 

Gap Insurance is required by some lenders if you owe more than the car is worth, and will pay for coverage if your car is totaled. New Car Replacement is offered by insurance companies for brand-new and recent-model year vehicles. If you happen to suffer a total loss, the company will pay to replace the car  without accounting for depreciation. 

Tips for Lowering Your Monthly Insurance Costs:

Aside from comparing new vs. used car insurance, there are a few other tactics we use to get you a lower monthly payment. Here are a few things we consider to ease the burden of premium costs and still keep you protected:

  • Switch Providers: We can shop around for a better option for you at any time, not just when you are buying a new(er) car. Switching companies often will not result in penalties.  
  • Change Coverage Amounts: You may be able to lower your coverage limits or eliminate features you don’t need to provide savings instantly. The industry is changing now more than ever before, and it pays to be aware of variations in your options every single day. We can help you re-evaluate your coverage options to find what works best.
  • Increase Your Deductible: If you choose to raise your deductible, you will have to pay more out of pocket for a claim before your insurance provider kicks in with coverage. It’s important to seriously consider whether you would be able pay your deductible when the time comes. If yes, raising your deductible can often lower your monthly payment.
  • Explore Usage-Based Insurance: As technology allows for opportunities to have your driving tracked, mobile apps and devices can be used to get incentives and rewards for good driving. Allowing yourself to be monitored can sometimes pay off over time (if you’re a good driver!).
  • Compare Various Models: As we mentioned previously, car insurance costs will differ depending on the model you are driving. It’s not just the difference between high-performance sports cars and a family sedan: many different traits make for a drastic difference in cost. Make sure to evaluate your options before making a purchase.

In summary, full coverage car insurance will generally cost less as years go by and your vehicle depreciates. We have quite a few paths we can take to re-evaluate your coverage and (hopefully!) lower your monthly car insurance payment. Contact us here at the Alexander Agency of St Charles today to find out how to save money while still getting the protection you need!