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Insurance is a key factor when choosing a new or used car.
The common perception is that used car insurance is cheaper because a used car is older and therefore worth less.
But, in reality, there are a number of factors that influence the cost of car insurance.
Used car insurance can be cheaper if the new car in question has a higher value. But this isn’t always the case.
If, for example, you’re trying to insure a high-end used car like a Porsche 911, the value of the car is likely to be greater than a standard new car like a Renault Clio or a Peugeot 208. In this case, the value of the car rather than its age means that used car insurance is likely to be more expensive.
Alternatively, if you are trying to insure a classic car, you’d need an agreed value policy rather than a standard car insurance policy. The cost of this will depend on the value of the car.
As the value of the car increases, so too does the liability an insurer has to take on.
New cars are likely to have extensive modern safety and security features.
These include traction control, anti-lock breaks, a rear view camera, tyre pressure monitoring, adaptive cruise control, alarms, and immobilisers.
Many of these features come as standard in a new car, while others can be added as optional extras. Older used cars are unlikely to have the same level of safety and security, which can impact on the premium.
The addition and complexity of modern technology means new cars can cost more to repair.
Firstly, the addition of more technological features increases the value of the car. As mentioned before, insurers therefore have to take on greater liability.
Technology can also make new cars more expensive to repair. For example, if an anti-lock braking sensor malfunctions, it can be expensive to repair, especially if the dealer sources the part directly from the manufacturer.
This can drive up the cost of premium and make used car insurance more appealing.
When buying a car on finance, the dealer may offer GAP insurance to cover the driver if the car is written off and the insurance pay-out doesn’t cover the cost of the finance settlement, because the customer is liable.
GAP insurance is optional and can be added to both new and used car insurance premiums and, again, it’s the value of the car that is likely to affect its cost.
There are a number of other factors that will affect the cost of a premium.
How the vehicle is used, the driver’s age, address and personal details, as well as their driving and claims history, will all be used by insurers to provide both new and used car insurance quotes.
There is no blanket answer as to which is cheaper. This is because car insurance needs to be tailored to each individual.
AbbeyAutoline searches the market to find cover that matches the needs of thousands of customers every day.
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