Newer cars cost more to insure because parts are more expensive, as well as the likelihood of a theft can contribute to premium. But why does the premium not decrease as much or at all as our vehicle gets older? Some companies give a "new car discount" that decreases each time the policy renews, thus actually raising the rate on the vehicle.
However, the main factor is, it can cost more to settle a claim with a used vehicle than a new vehicle.
For example: You own a vehicle that is worth $20,000 and it sustains $8000 in damage. The vehicle will be repaired and the insurance company will pay the $8000 minus your deductible.
But, if you own a vehicle that is worth $10,000 and it sustains $8000 in damage, we will have to total your vehicle because the damage is more than 75% of the value. In this case, the insurance company pays $10,000 minus your deductible instead of the $8000 in repairs.
*Please refer to your policy for limitations, deductibles, & coverage.
Do you feel you're paying too much for car insurance? Call for a quote today! (803) 909-9411.