My car is getting older, shouldn’t my insurance go down?
It is no secret that the insurance industry has seen a lot of changes in recent years. With a record number of miles driven, record high medical costs, more people using their smartphones while driving, and many other factors the premium for auto insurance has gone up across the country. So when you receive a renewal notice for your vehicle that just turned another year older and you face a rate increase instead of decrease, you might get confused. Some drivers even expect a decrease on a vehicle that has only has liability coverage so no coverage is provided to the damages of the aging car.
While the thought that the cost/risk to insure your car should go down as it loses value makes sense, the following have to be kept in mind:
- The value of a car only become an important insurance premium factor when your car is a total loss. So whether or not the dent and scratch happened on your 2010 Honda Civic or 2018 Honda Civic, makes hardly a difference to the body shop that usually charges the same per hour and materials no matter what car they work on. It is true that some newer vehicles are more expensive to fix due to added features, but those same features might make the car safer to begin with (see point below).
- The same argument holds true when you run into another vehicle in an accident. The damage and injuries caused to the other party has little to do with the age or value of your vehicle.
- Newer cars are, generally speaking, safer. Not only are new vehicles equipped with more safety features but they also have newer parts (tires, breaks, suspension, etc.) that make them more reliable. Responsible car owners will do their best to keep their vehicles in the best and safest shape, but insurance companies can only consider their loss experience for a larger group of vehicles.
- Newer cars are usually driven more safely. If you just bought a brand new car with 100 miles on the odometer, any blemish may give you anxiety so you give it the white glove treatment. If done consciously or not, you will be more careful when parking your car, pull out into traffic, when changing lanes, etc.
Clients are oftentimes pleasantly surprised when they call their insurance agent to request a quote on a newer car to replace an older vehicle and are told that their premium is going down. Depending on the insurance company, newer models may receive a New Vehicle Discount and vehicle age limits and discounts will vary.
Please do not hesitate to call us at 425-242-5252 for more information.
1500 Benson Road South, Suite 201
Renton, WA 98055