A big chunk of the cost of car ownership is auto insurance. The high cost of insuring a vehicle is only one factor to consider when shopping for used cars versus new models. So, are used cars cheaper to insure than new cars? 

It isn’t cheap to buy a used or a new car. You have to add up registration fees, taxes, monthly finance payments, fuel, and maintenance. Factor in the cost of insurance, and the investment grows even more. 

According to Bankrate, “The average cost of insurance now averages $1,771 per year for full coverage or $148 monthly. Minimum coverage insurance now averages $545 per year.”

Multiple factors influence the cost of car insurance. One important point to consider is the car’s age. 

“An older vehicle is generally cheaper to insure, mainly because older cars are less valuable, so an insurer won’t have to pay out as much in the event of a total loss,” ValuePenguin auto insurance expert Divya Sangameshwar explains.

Car insurance companies don’t take into account whether a car is “new” or “used.” It’s more about the age of the car and the various conditions that come with aging. 

 If your car is financed or leased, like most younger cars, you’ll probably need to carry full coverage. Full-coverage insurance is more expensive. Also, you might not have to carry comprehensive or collision coverage on an older vehicle, lowering your insurance bill. 

On the flip side, younger cars typically come with additional safety features. They can reduce your insurance premiums because these features lower your risk of a major accident. In addition, younger cars have cheaper and more easily accessible parts, making the car cheaper to insure. 

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If you’re looking to buy a new model but are concerned about the cost of insurance, consider these five affordable cars that are cheap to insure:

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Here are a few reasons your auto insurance could increase: 

The effect of inflation is noticeable in most sectors of our economy. The average increase is 7%, and the cost of car parts is closer to 10%. A cost increase for car parts will make it more expensive for your insurance company to repair your car, making your premiums higher. Supply chain issues and the labor shortage are making repair costs rise as much as 20%. That means it takes longer to repair your car, putting you in a rental for longer and costing you more in premiums. 

People are also driving more in 2022 than in the past two years. More people on the road leads to more wear-and-tear on cars and more car accidents. Sadly, these crashes are proving to be more severe and are causing more fatalities. In turn, those increased risks make your car insurance costlier. 

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