Many people believe that insuring old cars costs less than insuring new cars. However, that’s not always the case.
Newer vehicles with safety features like back-up cameras and automatic braking do a better job of preventing accidents. However, it typically costs more to repair and replace a car with the latest safety features.
We spoke with Dave Freeman, vice president, Personal Lines Underwriting, at Erie Insurance to find out how insuring old cars and new cars works.
Does insuring a newer, safer vehicle cost less than insuring old cars that lack extensive safety features?
There are a lot of variables that determine a driver’s insurance rates, and it’s impossible to pinpoint one specific factor. Essentially, a person’s driving history has a major impact on their insurance rates. The vehicle they drive may not impact their rate as much as you might think.
What other factors really impact a driver’s car insurance rates?
Underwriters factor in an individual’s age, marital status, gender (although some states don’t allow insurance companies to use this), vehicle usage, driving history and claim history. Younger drivers typically have more expensive insurance rates because statistically they’re more likely to file a claim.
Just out of curiosity, who typically has the lowest rates?
It’s typically middle-aged married folks without children of driving age.
What are some things drivers can do to keep their rates lower?
The most important ones include driving safely (that includes no distracted driving), obeying posted speed limits and traffic laws, and selecting higher deductibles. When the insurance company does not have to pay the small-dollar losses, it, in return, can offer substantial premium reductions.
When shopping for new car insurance, don’t settle for the cheapest coverage. It probably excludes key coverage you might need down the line. Talking to an insurance professional like your local ERIE Agent can help you get the right coverage. Bundling your auto coverage with your homeowners insurance or renters insurance can help someone with multiple needs get discounts and lower his or her insurance premiums.
The verdict: Safe driving matters more than the car you drive.
While the car you drive can influence your insurance rates, your driving habits affect it much more. By practicing safe driving habits, you will benefit yourself and other drivers while also saving money.
For extra savings, consider ERIE Rate Lock®*. This policy endorsement freezes your auto premium year after year even if you file a claim. Your rate only changes when you add or remove a vehicle or a driver from your policy or change the location where your car is garaged. Contact a local ERIE Agent to learn more and get a free quote.
*Not available in North Carolina, Maryland and New York. Limited to three years in Virginia. ERIE Rate Lock® does not guarantee continued insurance coverage. Insured must meet applicable underwriting guidelines. Premium may change if you make a policy change.