Next to petrol and services, insurance is one of your car’s major running costs. But what exactly goes into deciding a premium? Are older cars cheaper to insure than newer ones, and should you get the bare minimum third-party car insurance? That depends on a lot of different factors.
Though spending money on insurance for an old car might seem counterintuitive, here’s why you shouldn’t be too quick to judge.
How are car insurance premiums calculated?
When you fill out details for car insurance online, you’ll be assessed on your ‘risk rating.’ By this, we mean the chances of the insurer needing to pay a claim and how large claim/s might be. If you’re considered high risk, you’ll pay a higher premium than someone who’s low risk.
It isn’t just the details they’re assessing. Depending on the insurer, factors can include your driving and claims history, your parking address and security, your car’s year/make/model/etc., how likely it is to get stolen, and its safety rating. And though these factors are usually quite similar between insurers, there are often noticeable differences in their weighting.
So, now we know the cost of your car insurance online will depend on all your risk factors and each insurance provider’s weighting of them.
Your car does contribute to your risk profile and thus impacts your premium. So is cheap car insurance easier to find for old cars or new ones?
Can you get cheap car insurance for your old car?
Because premiums are based on risk, your car’s age plays a factor. And we know older cars are less valuable than brand new cars.
Hypothetically then, you’d receive a better premium for a 2010 model Suzuki Swift than the 2021 model (if all other variables remained the same). The car’s value has depreciated, and, in the worst-case scenario, if your car were written off, it would cost the insurer less to replace it than a new one.
Older cars are usually more likely to have mechanical failures or breakdowns too. But with car insurance, the more pressing problem is older cars tend to be more costly to fix. Parts can be harder to source because there are fewer suppliers, for a start. This means your old car poses a higher risk to the insurer than a new one.
Importantly, modern cars usually have a higher safety rating, largely due to rapid advancements in design and technology. It’s another area where older cars can pose a higher risk to insurers.
And if your car makes you a riskier car insurance customer, you’ll pay a higher premium even if your car isn’t worth a whole lot.
So is comprehensive car insurance worth it?
If you’re the proud owner of high mileage and an old car, you may be tempted to skip insurance. Or, you may decide to only pay the bare minimum third party car insurance. While the latter is a step in the right direction, even that can leave you financially vulnerable after accidental damage or theft.
Without comprehensive car insurance, when accidental damage occurs, you’ll need to dip into your savings to get your car back on the road as it was before. Older cars are usually easier to steal too, and if that happens, comprehensive car insurance will get you a suitable replacement.
Regardless of what car you drive, having a great insurer and policy can save you a vast amount of money, stress, and frustration if things go wrong.
Research the wide range of cheap car insurance available online and look for companies that offer a range of benefits, including discounts. Ensure you’re well protected financially for the rest of your car’s life.