Do you ever question why different cars cost you different amounts for car insurance premiums? Why is it that a newer design and model may cost you high in auto insurance and an older car may only cost you cheap every month? The new car insurance cost against the old car insurance cost has been a subject that you need to review prior to purchasing any car. You should also review insurance costs prior to purchasing if you do not want to get caught in a financial trap.
New cars would cost more to insure than old cars for three major reasons.
Firstly, an auto theft of any new car would cost higher than auto theft of an older car. This is due to the large value difference of the new car versus old car. It would simply cost you more money to replace an expensive, new car than an older and less expensive car.
Secondly, the cost to repair a brand new car would be higher than the cost to repair an older one. This fact should also enhance your insurance premium cost for any new car. For instance, if a new car is damaged in an accident, the auto repair shop would charge you exorbitant money for various repairs than the older car. For this major reason, your insurer would charge you higher insurance premiums on a new car than an older one, because of such repair costs.
Type and style of car
Thirdly, the type and style of car would also largely affect the cost of car insurance premiums that your car insurance company would be charging you. Insurance companies make use of actuarial statistic tables that reveal the past loss experience on a particular style and type of car. They would be using these tables, for helping them calculate what premiums should be charged to their customers in future. Statistical tables reveal these insurance companies that owners of specific styles and types of cars, would engage in more risky driving behavior than car owners of average type and style.
For instance, best car insurance Philippines statistical tables reveal that insurer has undergone more losses with sports cars than with average cars. The reason is owner of a sports car would have higher chances of driving such car faster and riskier than the owner of a non-sports model car. With such speed and risk, chances of more losses for the insurance companies come along. With such loss and risk increase, the prudential car insurance company has to enhance their return. As a result, they would charge more for car insurance premiums.
Yet another example of how the type and style of vehicle might present an insurance company with additional risk would be the off-road style vehicles. These would include vehicles such as the Hummer line of vehicles. These kinds of vehicles have been specifically designed to perform in the off-road type environment. They have been raised up off the ground more than regular vehicles for under carriage clearance. In addition, they would also encompass four-wheel drive ability.