If you believe insuring an old car costs less than insuring a new car, you’re not alone. However, that’s not always the case when it comes to auto insurance.
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 technology. (See also: Can You Guess The Real Cost of a Fender Bender?)
If your car was made overseas and parts will have to be shipped to you if they need replaced, that can also drive up the cost of your insurance.
We spoke with Dave Freeman, vice president and regional underwriting officer at Erie Insurance, to find out how insuring old cars and new cars works.
Q: Does Insuring A Newer, Safer Vehicle Cost Less Than Insuring Old Cars That Lack Extensive Safety Features?
A: 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.
Q: So, What Other Factors Really Impact A Driver’s Car Insurance Rates?
A: Auto insurance underwriters factor in vehicle usage, driving history and claim history. They may also consider an individual’s age, marital status and gender (although some states don’t allow insurance companies to use these factors.) Younger drivers typically have more expensive insurance rates because statistically they’re more likely to file a claim. (See also: What Determines the Price of My Auto Insurance?)
Q: Just Out Of Curiosity, Who Typically Has The Lowest Rates?
A: It’s typically middle-aged married people without children of driving age who have the lowest auto insurance rates.
Q: What Are Some Things Drivers Can Do To Keep Their Rates Lower?
A: The most important ones include driving safely (that includes no distracted driving), obeying posted speed limits and traffic laws, and selecting higher deductibles. (See our guide on how to choose the right auto insurance deductible for you.)
When shopping for new car insurance, don’t settle for the cheapest coverage. It probably excludes key coverages 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 or renters insurance can help you get discounts and lower your insurance premiums. Learn more about auto insurance discounts available with ERIE.
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 even more. By practicing safe driving habits, you will keep yourself and other drivers safe while also saving money.
To help avoid rate increases, consider ERIE Rate Lock®*. This policy endorsement freezes your auto premium year after year, until you add or remove a vehicle or a driver from your policy or change the location where your car is garaged. Talk to a local ERIE agent to learn more and get a free quote.
*Not available in all states. 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.
This story was originally published in 2014. It was updated with new information in 2019.