What Happens to Car Insurance Cost as Cars Get Older?

Published On Oct 27, 2021 11:00 AM By InsuranceDekho

Read this article to take a note of what happens to car insurance costs as your car gets older.

A car is not just a method of transportation for many individuals, it is also a member of their family. It is the first vehicle for some, and a memorable present for others. We all have our motivations for doing things the way we do. This sense of emotional attachment leads to a desire to keep it even after its existence has come to an end. Many people still cling on to their first car or even inherited family vehicles.

What Happens to Car Insurance Cost as Cars Get Older?

It's crucial to remember that the age of a car isn't the only element that goes into determining the cost of insurance. There are a number of other things to consider, including:

  • Gender and Age: Male drivers between the ages of 18 and 25 are more likely to be involved in an accident. Insurance premiums are generally higher for younger drivers.
  • Place of Residence: If you live in a town, you have a better chance of receiving a larger premium.
  • Manufacturer and Model: Each model has a unique claim with auto insurance providers.
  • Parts availability: If components are not easily available, the cost of replacement increases in the event of an accident, increasing the prices.
  • Regions prone to theft: Because there is a larger risk of theft of components or a car in certain areas, the premium goes up.
  • The anti-theft system/security system car gadgets: Because the odds of your car being stolen are reduced, your insurer will pay you discounts on your car insurance rate if you have this fitted.
  • Breakdown possibilities: If your automobile is in good condition, your premium will be lower because there are fewer possibilities of it breaking down or needing insurance right away.
  • Type of policy: Because third-party insurance only covers third-party liabilities, it is less expensive than comprehensive automobile insurance.
  • Add-On Premiums: Comprehensive coverage can be supplemented with add-on premiums to provide additional coverage advantages. These add-ons are not included in the insurance but can be purchased for an additional fee, raising the overall premium.
  • History of driving: Driving safely, observing all traffic regulations, and driving within the speed limit not only protects you from potential accidents but also improves the credibility of your driving record.
  • Unsafe driving demonstrates distracted driving, which raises the insurance risk and necessitates a higher premium.

Is Car Insurance Cheaper or Expensive?

IDVs, or Insured Declared Values, are commonly used in car insurance calculations. As your vehicle's age grows, its market worth drops, resulting in lower insurance premiums. A new car, on the other hand, has a higher value, resulting in higher insurance costs.

Furthermore, modern cars with features such as backup cameras, automatic brakes, and other safety aids are more likely to keep you safe in an accident, but an old car would not be able to provide you with this luxury. Other than lower insurance rates, as your car becomes older, you gain other perks such as claim-free driving and a significant No Claim Bonus, which results in a lower insurance price each year.

When you renew your old car's insurance for the third year in a row, your premiums will be lower. As a result of all of these reasons, insurance for vintage cars is less expensive than insurance for new cars. 

Take Away

Keep in mind that, whether your car is new or old, if you drive it without insurance, you are leaving it vulnerable to damage, and the amount you would pay in the event of an accident would be considerably more than if you had purchased insurance earlier.

Also Read:

What To Do If Magma HDI Car Insurance Policy Gets Lapsed?

How To Claim Car Insurance After an Accident from United India?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard. 

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