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Auto Insurance Rate Changers - New vs. Used Vehicles

Guest post by: John Clark

Article Overview: If you are searching for a car and you are not paying much attention to your insurance rates, you may be surprised when you are faced with a higher premium than you expected if you have a new car. This is because your premium will be higher when your car value is higher. If you are searching for a new or used car on a budget, you may want to consider the fact that new cars will mean higher premiums.

Auto Insurance Rate Changers - New vs. Used Vehicles

If you are searching for a car and you are not paying much attention to your insurance rates, you may be surprised when you are faced with a higher premium than you expected if you have a new car. This is because your premium will be higher when your car value is higher. If you are searching for a new or used car on a budget, you may want to consider the fact that new cars will mean higher premiums. Why New Cars Have Higher Premiums

New cars will have a higher premium because it poses as a greater risk to the insurance company. This means that if you are in a car accident, the cost to repair or replace your new car will be more expensive than it would be to repair or replace a used car. In addition, new cars are more susceptible to thievery.

Collision Insurance Coverage

Depending on the condition of a used car, and whether or not you are purchasing the car with cash or through a loan you may not need collision insurance coverage as well. Although collision is still an option, it is mostly used for new cars. This is because an older car is cheaper and easier to replace. It would be too excessive to purchase collision coverage. The cost to repair the car would be greater than the actual cash value of the car. For example, if your used car is only worth around two thousand dollars and you have collision insurance with deductible that is worth one thousand dollars, you would only get one thousand dollars from your insurance company.

The only way that an older car would go up in price with premiums would be a classic car. This is because the actual cash value of the car would be higher. The car would be a greater risk than a new car.

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Article Tags: auto insurance rate, car value, insurance, insurance rates
Referred by: http://www.franchisefix.com/



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