How Your New Car Might Affect Your Insurance Rates

After years of only buying used vehicles, you finally have the chance to purchase a brand new car. While the prospect is exciting, it helps to know what to expect once that new car is yours. One of the things that will change is the rate that you pay for auto insurance  San Diego. Here is how that new car will impact the premiums that you pay.

What Happens After an Accident?

In the past, your premiums were pretty reasonable because of the age of the vehicle you were driving. An insurance provider is not particularly concerned about what customers spend regarding maintenance and upkeep, but they do look at what it would take to replace the vehicle after an accident.

Consider what would happen if someone ran a stop sign and plowed into your car. After a professional examines it, the estimate for repairs is more than the car is worth. The insurance provider is likely to total the vehicle and provide you with enough money to purchase something that is similar to the car. With an older car, the amount paid by the provider to settle the claim is typically modest.

Now think of what would happen if the same chain of events occurred with a new car. The provider will end up paying a lot more money to total the vehicle. In a sense, the vendor assumed more risk by ensuring that new car, because it would cost more to replace it. The customer pays more for collision coverage to offset that risk.

The Issue of Theft

An accident is not the only situation in which a vehicle may have to be replaced. If someone steals your car and it cannot be recovered, the theft provisions in the insurance contract will provide the funds to replace it. Obviously, it costs less money to replace an older car than it does to replace a new one. As with the collision coverage, you can expect to pay more for the theft protection of that new car.

Another issue to consider is the likelihood that someone will try to steal your car. Your older vehicles were not in a lot of danger of being taken, even if they were in decent shape. A new car, however, will fetch a much better price for the thief, either by being sold outright or stripped down for parts that are currently in high demand. Because your new car is more likely to be targeted for theft.

Do not let the higher expense of some parts of the coverage discourage you from investing in a new vehicle. Know what to expect and talk to an agent about what you can do to keep the premium within a manageable range. This strategy will allow you to have an equitable amount of coverage and still drive around town in the car you always wanted.