Shopping for a new car is an exciting time for many people. There are several variables to consider during the search. You’ll have to figure out if you’re more interested in purchasing a used car or a new car. You’ll also have to figure out if you can find insurance that aligns with your financial situation. This is where things may become tricky. For many people, finding affordable insurance rates is challenging. Here’s a look at some insurance pros and cons of purchasing new or used cars.
- Purchasing A New Car
Similar to purchasing a home for the first time, purchasing a new car is often one of the most exciting moments you’ll experience during your life. You’ve likely had countless dreams of hitting the road in your car and all the fun adventures you plan to take. Purchasing a new car is financially appealing because you don’t have to worry about potential repairs for a long time. As long as you perform regular maintenance on your car, you should notice any signs of wear and tear for many years. Purchasing a new car also means that you’ll have access to the latest technological features. New features such as lane assist, and automatic braking should help you stay safe on the road. However, there are some potential issues as well. If your car suffers damage, your repair costs will likely be expensive because it’s equipped with enhanced parts. Analysts also point out that new cars are considered easier targets for criminals to steal. This data could lead to you paying higher insurance premiums.
- Purchasing a Used Car
If you’re committed to a budget, purchasing a used car is probably your best option. Purchasing a used car may lower your insurance requirements. If the Actual Cash Value of the car is low, adding full coverage may not be necessary. It’s recommended that you avoid a situation where your insurance deductible costs more than the vehicle’s repair and replacement costs. In most cases, used car warranties are available to assist with potential repair costs.
- Insurance Costs
While purchasing general liability coverage is mandatory, you have the option of adding any other types of coverage based on your needs. Collision and comprehensive coverage are the two most common car insurance policy add-ons. If your car suffered damages, collision coverage would assist with the potential repair costs minus your deductible. Comprehensive coverage protects you if your car is stolen or vandalized. While calculating your auto insurance premium, your insurance agent will assess multiple factors. It’s recommended that you compare and contrast all of your policy options before making a decision.
- Variables That Impact Car Insurance Rates
Your insurance agent will research recent crime data in your neighborhood. Staying in a highly populated area may raise your premiums. Your insurance agent will also look at your previous driving record. If you have any previous violations on your driving record, you’ll pay higher premiums until you can establish a track record of safe driving. Vehicle usage is another variable that your insurance agent will assess. If you’re only driving occasionally, you’ll pay lower premiums compared to if you were driving on a daily basis. Driving on a limited basis reduces your chances of being involved in an accident.
Consult with Advanced Insurance Group
There are many variables to consider when exploring the pros and cons of purchasing new or used cars. There’s a chance you could end up spending more money on a used car over a five-year span. If you have any questions, contact our team here at Advanced Insurance Group, and we will assist you.