Why is auto insurance for new cars so expensive?

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent respective years as a Farmers Insurance CSR, gaining a solid reason of insurance products including home, biography, car, and commercial and working directly with insurance customers to understand their needs. She has since used that cognition in her more than ten years as a writer, largely in the insuranc …

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Leslie Kasperowicz

Farmers CSR for 4 Years Leslie Kasperowicz

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family ’ randomness policy agency, FCI Agency, for 15 years ( BBB A+ ). He is licensed as an agent to write property and fatal accident policy, including home plate, car, umbrella, and dwelling fire policy. He ’ sulfur besides been featured on sites like Reviews.com and Safeco. He reviews subject, ensuring that antique …
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Licensed Auto Insurance Agent Daniel Walker

column Guidelines : We are a free on-line resource for anyone concern in learning more about car indemnity. Our goal is to be an objective, third-party resource for everything car policy related. We update our locate regularly, and all content is reviewed by car insurance experts .

Things to Remember…

  • Auto insurance is more expensive for a new car because the repairs are more costly
  • Collision and comprehensive coverage is the most expensive part of auto insurance because it will pay for damages
  • Liability is not just the minimum amount required by law; it is also the least expensive
  • Comprehensive will pay if your car has damage, but you may still have financial obligations

Is the old age of your cable car one of the factors that feign car policy rates ? The short answer is yes. So why is car insurance for newly cars so expensive ? This is for a variety show of reasons. One is because the repairs are more costly. When an car indemnity party prepares a quotation for your car policy premiums, they consider the do and model of the vehicle. They besides consider the year .
Auto policy rate calculations depend on many factors. Most consumers are more than familiar with the list. They besides expect to pay more when they purchase a fresh vehicle. however, the reasons for the extra costs have always been inquisitive .
You may be one of the many who assumes the monetary value of the car is the reason. This is surely true. There are other issues to take into explanation, besides .
The price of your car policy is not entirely pendent on the monetary value on the dagger of your new cable car. The design of the vehicle, for exemplify, and the total of options you select all play a role .
New cars have a multitude of guard features, many of which are optional. They only serve as a room to decrease your quote to keep the rates comparable. The bottom line is simple—new car owners should always expect to pay more than the average car policy costs .
Start comparing car indemnity quotes for new cars to get low-cost rates nowadays by using your ZIP code in our free on-line tool .

Why does my new car auto insurance cost so much?

Why is my car policy indeed senior high school ? Why do I have such expensive car indemnity ? The make, model, and class of your car may be why car indemnity is sol expensive. many factors can affect your car policy rates, careless of your vehicle ’ sulfur old age, but we ’ ll stress on respective specific to newer vehicles. Keep interpretation for more .

How does the value of a car affect comprehensive and collision auto insurance coverage?

According to a nine-year survey performed by the Insurance Information Institute, the car indemnity industry spent an average of $ 53,460,108 in 2001 on collision and comprehensive claims .
The number soared to $ 62,589,229 by 2010. The reason for the increase has a mastermind correlation to the cost of repairs .
collision and comprehensive coverage is the most expensive function of car indemnity as you can see in the postpone below. When an average consumer receives a quote, the sum is greater with these two levels. That is because collision and comprehensive examination will pay for the damage .
Average Annual Auto Insurance Rates for Liability, Collision, Comprehensive, and Full Coverage

States Average Annual Liability Insurance Rates Average Annual Collision Insurance Rates Average Annual Comprehensive Insurance Rates Average Annual Full Coverage Insurance Rates
Alabama $372.57 $317.96 $156.31 $868.48
Alaska $547.34 $350.81 $137.26 $1,027.75
Arizona $488.59 $277.96 $186.12 $972.85
Arkansas $381.14 $321.80 $190.41 $906.34
California $462.95 $396.55 $100.54 $986.75
Colorado $477.10 $287.00 $174.61 $981.64
Connecticut $633.95 $368.51 $131.62 $1,151.07
Delaware $776.50 $318.77 $122.49 $1,240.57
District of Columbia $628.09 $468.67 $233.24 $1,330.73
Florida $845.05 $331.83 $159.18 $1,048.40
Georgia $490.64 $313.17 $101.56 $873.28
Hawaii $458.49 $219.05 $116.55 $679.89
Idaho $337.17 $309.71 $128.13 $884.56
Illinois $430.54 $250.29 $122.06 $755.03
Indiana $372.44 $219.75 $183.53 $702.46
Iowa $293.34 $263.33 $267.91 $862.93
Kansas $342.33 $267.91 $141.39 $938.51
Kentucky $518.91 $414.36 $215.17 $1,405.36
Louisiana $727.15 $259.98 $104.98 $703.82
Maine $333.92 $353.99 $152.72 $1,116.45
Maryland $599.48 $388.28 $134.96 $1,129.29
Massachusetts $587.75 $413.83 $154.85 $1,364.00
Michigan $722.04 $234.40 $184.27 $875.49
Minnesota $439.58 $323.22 $210.33 $994.05
Mississippi $437.38 $275.28 $181.27 $872.43
Missouri $399.41 $265.32 $211.91 $863.52
Montana $387.77 $237.13 $229.25 $831.02
Nebraska $349.07 $303.86 $117.63 $1,103.05
Nevada $647.07 $307.42 $110.77 $818.75
New Hampshire $393.24 $381.86 $131.35 $1,382.79
New Jersey $865.55 $276.98 $172.57 $937.59
New Mexico $462.21 $385.02 $171.12 $1,360.66
New York $784.98 $293.59 $136.08 $789.09
North Carolina $357.59 $244.09 $231.04 $773.30
North Dakota $282.55 $269.84 $121.61 $788.56
Ohio $376.16 $318.47 $225.84 $1,005.32
Oklahoma $441.57 $226.83 $93.87 $904.83
Oregon $553.43 $327.24 $144.21 $970.51
Pennsylvania $495.02 $411.51 $132.19 $1,303.50
Rhode Island $720.06 $265.07 $180.94 $973.10
South Carolina $497.50 $208.58 $258.11 $766.91
South Dakota $289.04 $282.96 $116.53 $1,257.13
Tennessee $397.73 $309.07 $148.45 $871.43
Texas $498.44 $374.49 $206.42 $1,109.66
Utah $471.26 $265.90 $109.50 $872.93
Vermont $340.98 $295.42 $125.48 $764.02
Virginia $413.12 $280.52 $136.54 $842.67
Washington $568.92 $265.74 $106.38 $968.80
West Virginia $501.44 $329.67 $204.28 $1,025.78
Wisconsin $359.84 $226.00 $136.81 $737.18
Wyoming $323.38 $278.83 $247.57 $847.44
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Compare RatesStart Now → What is the difference between collision and comprehensive car policy ? Collision protects against shock like car accidents. comprehensive coverage protects against weather-related issues, like fire or floods, american samoa good as vandalism and larceny .
New cars are more expensive to repair, and they are costly to replace. If person steals your car, and no one finds it, your comprehensive coverage takes care of the problem. The combination of new car prices and repairs equals higher cable car policy prices .

Liability is not just the minimum total required by law ; it is besides the least expensive .

unfortunately, most people will purchase only the minimum liability coverage. even with the highest limits, liability will not fulfill your expectations because it covers the property damage and the bodily injury of other drivers and their cable car, not you or your car .
however, if you finance your fresh vehicle purchase, you most probably won ’ triiodothyronine be able to choose indebtedness only. Most lenders require you to carry both comprehensive examination and collision coverage under the terms of your car loanword .
When you purchase a newly vehicle, you need to complete a morsel of inquiry. You need to find out which cars cost the least to repair. You should besides think about larceny and how much a newly vehicle costs .
Your car policy provider will surely consider these factors. Keep read for more on what affects rates and ways you may be able to find low-cost car policy for a fresh car .

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How Do a Vehicle’s Safety Record and Safety Features Affect Auto Insurance Rates?

equitable because a vehicle has a gamey retail value does not always mean the rates will be higher than one that does not. In actuality, most raw cars cost more to fix than old cars. Some models will precisely cost more than others do .
The type of fomite you purchase will play into your car policy rates for a new car. For exemplar, the Insurance Institute for Highway Safety ( IIHS ) shows some vehicles are riskier than others because of how they are built .
According to their data, many newer vehicles have less capacity to withstand low-impact collisions. The designs of the bumpers do not match universally. passenger vehicles have federal regulations they must meet .
One example of a crash quiz conducted by the IIHS is an SUV and a passenger vehicle collide. The result damage is quite severe, even at first gear speeds of 10 miles per hour. During the doss test, the IIHS used respective examples, including the Honda CR-V versus a Honda Civic and the Ford Escape versus the Ford Focus .

When assessing the front bumper damage post-crash trial, the repair costs were huge. The gloomy bumper on the Honda Civic did not align with the higher bumper of the Honda CR-V. The price to the SUV was $ 1,721, while the Civic received $ 1,274 in damages .
This testing proved the motivation for the automotive industry to comply with all current federal regulations .
ironically, not all fresh cars fit into this category, and each year manufacturers make elusive changes. unfortunately, the car insurance industry tends to combine makes and models, placing them in specific risk groups and rarely making updates .

The National Highway Traffic and Safety Administration ( NHTSA ) discusses the Federal Motor Vehicle Safety Standards and Regulations regarding bumpers.

The NHTSA understands the importance of parts like bumpers, as they are the first agate line of defense against serious injuries .
unfortunately, until the regulations spread to SUVs, cable car insurance rates will continue to increase, and new cars will see higher rates, meaning consumers will continue to pay more .

Why is the Cost to Repair or Replace a Damaged Vehicle So High?

Newer cars have expensive parts, which increases the estimate by body and repair shops. Since most states have laws regarding aftermarket parts, they often must purchase original manufacturer parts, increasing costs .
When a customer submits a damage call, the policy ship’s company pays close attention. Except for the deductible, the insurance company is responsible for the costs. This means the ship’s company monitors every step to ensure choice and performance .
Insurance companies also measure safety to ensure the vehicle receives proper repair.
substitute parts damaged in a collision must be up to equality. Aftermarket parts are much of lower timbre. They may not fit correctly or corrode besides promptly. This compromises the integrity of the vehicle and can place the insured at risk for future accidents .
Since the car policy industry is in the occupation of risk assessment, they consider this unacceptable. If they discover inferior products, they have the justly to refuse payment to the body patronize. As they often make a direct payment, they can control the consequence .

What is a New Car’s Risk of Being Stolen?

When shopping for a new vehicle, it’s a good idea to look into its value to thieves, particularly if you don’t park in a garage. One way to decrease theft is to make sure your vehicle has anti-theft technology. You also want to make sure you have all of the protection you need from the insurance perspective. 

While comprehensive will pay if your car is stolen ( and damaged as a result ), you may still have fiscal obligations. Consider a larceny, for model. The finance company will expect your monthly requital careless of the condition of your vehicle .

To make indisputable you ’ re prepare for situations like this, GAP insurance ( which covers the remainder between what your new car is presently worth and the amount you hush owe the lender if the vehicle is seriously damaged or totaled ) and new car successor coverage are both an excellent type of policy option to add to your policy ( on acme of your comprehensive coverage ) .
It is besides a good idea to add lease car reimbursement. While your cable car is in the body shop, your life continues. This means you either pay out-of-pocket for a rental or utilize your benefits. rental cars can get rather expensive .
Although your rates will be slightly higher, these add-ons can provide you with peace of mind .

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What are Other Ways a New Car Affects Auto Insurance Rates?

Consumers with new cars much purchase excess options. This includes GAP coverage and rental car reimbursement, which we already discussed. optional car indemnity coverage is another way that your rates may increase .
however, it alone makes sense to choose sealed fiddling extras when you have a new car. This is particularly true when you ’ re still paying off the vehicle .

When is Auto Insurance Cheaper for New Cars?

New cars can be well cheaper to insure than old cars when the honest-to-god car is a classical. For exercise, a 1952 Thunderbird may cost three or four times ampere much to insure as your raw car. While it is true that most cars depreciate, it does not apply to all vehicles .
classical vehicles are more expensive because they are specialization vehicles .
Their parts are rare, which makes them unmanageable to locate, repair, and restore. They often require regular maintenance, and this gets dearly-won. There are not excessively many mechanics trained to work on authoritative cars .
They besides have eminent visibility. Car thieves know the value and take more risks. Consider two cars in the lapp parking fortune .
One is classical, and the other is a mark new Ford Mustang. Each looks appealing to a thief, but one is worth more. The odds of the Mustang remaining parked safely are much higher than for the authoritative car .
When you add all of these into the equation, it is easy to see why the rates are higher.
The car policy companies absolutely understand. This is why most classical car owners have forte insurance. They rarely use a standard agency or policy .

Should you buy a brand new car?

You will need to face reality. If you buy a new cable car, your rates will be higher than a use cable car. only you can decide if the extra indemnity price associated with a newfangled car is worth it. however, a fresh car doesn ’ thyroxine beggarly you won ’ thymine have the opportunity to save money. So how do you save on policy for a new car ? The inaugural step is to shop around .
many car indemnity companies want your business. The odds are even in your privilege. All you need to do is take your time and find the matchless that works for you. You can besides ask about discounts. Most companies offer a kind, and chances are you ’ ll qualify for at least a few .
There is always good news when it comes to car policy. flush if you have a high premium, it will not remain senior high school. After the first gear condition, your rates should start decreasing .
Review your refilling cautiously. Do all you can to ensure you receive a fair price. Remember, if you do not see changes soon, you can always switch companies .

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How Do you Purchase Auto Insurance For a New Car?

To drive a new vehicle off the lot, you ’ ll need an insurance policy. So how do you get started ? It ’ s a good estimate to shop around before making your leverage, using the make and model. This way, you can make all the cable car insurance coverage decisions ( like coverage amount, insurance company, etc. ) before you actually sign on the dot line .
If you ’ ve done all the homework oeuvre for purchasing an indemnity policy, all you have to do once you get your new vehicle is call the insurance company, provide them with the VIN, and make your first payment. vitamin a soon as you receive proof of your coverage ( which you can typically get on your telephone ), you ’ ll be ready for the road .

Why is Auto Insurance for New Cars So Expensive? What’s The Bottom Line?

You can choose to purchase liability-only coverage to keep your costs down ( though this international relations and security network ’ metric ton recommended ), american samoa long as you meet the minimum necessity set by your state. however, if you financed the vehicle, you might be required to purchase collision and comprehensive coverage under the terms of your lend. If so, you ’ ll find that these two coverage types are often the most expensive partially of car insurance because they pay for damages .

Frequently Asked Questions: Why is auto insurance for new cars so expensive?

Do you still have questions about modern car car policy ? Read these frequently asked questions for more .

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#1 – What is an insurance grace period?

If you already have an cover vehicle when you decide to purchase a newfangled car, you may be able to use your indemnity policy ’ s grace period to drive off the lot .
This means your stream coverage will protect your modern vehicle for a short time, so you don ’ t have to purchase new coverage before you can drive your vehicle home. normally, you only have a couple of weeks ( sometimes up to 30 days ) after the purchase of your fomite to obtain the necessity coverage, however .

#2 – How do you transfer auto insurance to a new car?

Transferring your existing car indemnity policy from one car to another is fairly elementary. You can call your policy agent, who should be able to complete this over the call. however, depending on your insurance company, you may even be able to transfer coverage through an app or on-line. Check with your insurance company to find out more.

#3 – How do you get auto insurance on a second vehicle?

If you already have a policy when you purchase a second fomite, initially, your policy company ’ s grace period will credibly apply. When it ’ randomness meter to add the newly vehicle to your policy, you ’ ll likely be able to either call your indemnity agentive role or use a web portal vein to update your coverage .

#4 – What do you need to know about insuring your first car?

As we ’ ve already discussed, to purchase your vehicle and drive it off the franchise lot, you ’ ll need to show proof of insurance. The best way to do this is to do your inquiry ahead of time and already have an indemnity company and coverage mix in mind based on the make and model of the vehicle you place to purchase. That direction, all you need to do is provide specific vehicle data to purchase your policy .
If you are quick to buy car insurance for your new car, find the most low-cost car policy rate based on the name, model, and year of your car by entering your ZIP code into our detached cock nowadays .

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