Does the age of a car affect insurance?

Auto insurance for old cars is often cheaper due to their low resale value. However, new car owners get more discounts. Modern safety features can lower your rates by 8%.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Nov 1, 2021

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Things to remember...

  • Newer cars come with higher insurance rates than older ones, but newer models might be able to access unique discounts
  • Owners of older, low-resale-value cars might opt to drop collision and comprehensive insurance
  • Certain factors outside of the year of the car could raise insurance rates

Auto insurance companies do not look at one or two factors when quoting an insurance premium rate. Anyone who previously filled out an application for an auto insurance quote knows the company’s representative is going to ask a significant number of questions.

A buyer intending to review several quotes does so with the purpose of acquiring an excellent insurance policy. The numerous answers to a variety of questions play a role in receiving competitive quotes on insurance premiums.

Certain questions really should be expected. A person should expect inquiries about the following:

Applicants might still be worried about seemingly innocuous factors that could drive up the cost of insurance. The year the car was manufactured may be one of those factors. So, does the age of a car automatically lead to higher insurance rates?

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New Cars and Insurance Rates

The year a vehicle was made can impact auto insurance rates, but not necessarily in a harsh way. A new car is likely to come with a costlier premium, but not an outright punitive one.

In general, newer cars are going to be more costly to insure than would be the case with an older model.

If a vehicle that was two years old was totaled in an accident, the insurance company may be required to pay, say, $27,000 to cover the total loss of a brand new car.

The total loss on a used car with a resale value of only $2,500 is obviously less costly to insurance companies.

Interestingly, a newer model may be able to benefit somewhat from its age since an insurance provider might actually issue a new car discount.

New cars are often manufactured with modernized features capable of enhancing safety or preventing theft such as the following:

  • airbags
  • anti-lock brakes
  • car alarms are standard features in vehicles

Car manufacturers are always testing and improving design and engineering capabilities. A new car with added safety and security features appeals to insurance carriers so discounts may be made available.

An available discount could even be quite generous. Drivers appreciate discounts that save them money.


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Older Cars and Insurance

Purchasing a new or newer vehicle to replace an older one is not always an option for those on a limited budget.

Replacing an older vehicle may not even be necessary as long as the car runs reliably well. And yes, the benefit of older cars not being too expensive to insure is a plus.

Cutting back on certain “add-on insurances” is also an option with older vehicles.

With older cars, there may be a decision made to eliminate two very common categories of insurance associated with newer cars:

  • comprehensive
  • collision

The former covers a variety of non-maintenance and non-accident perils that could cause damage to a vehicle. The latter covers repairs to the driver’s car when he or she is responsible for an accident. Both of these categories come with deductibles.

A $500 deductible is not uncommon although going higher is possible.

With older cars, the resale value diminishes so there is less of a need for both categories of insurance.

Both could be helpful since they would cover possible damages, but someone who never previously filed claims under these types of coverage might be less inclined to pay hundreds of dollars a year for non-liability protections on an older, low-valued vehicle.

That said, if the old car is totaled, a lack of comprehensive or collision insurance means the driver is stuck carrying the loss on his/her shoulders.

On the end of the spectrum, someone with an older car might choose to increase liability insurance limits. Older cars may suffer mechanical and age-related issues when driving. Upping liability coverage could be worth it to drivers of older cars.

Non-Age Factors

Whether the vehicle is old or new, certain factors are known to drive up rates.

A sports car comes with higher rates since the chances of the driver hitting higher rates of speed increase. The age of the driver may mean a lot more than the age of the car as well.

Younger drivers, much to their chagrin, are commonly required to pay more for their vehicle insurance. show those under the age of 25 are at a higher risk for getting into an accident.

Sports car and younger drivers should not think purchasing options are strictly limited, though. Comparison shopping can do a lot towards finding less-costly vehicle insurance.

Comparison shop today to find the coverage that’s right for you. Enter your zip code below to get started.

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