India is a country with a huge population and not all use public transport for their daily or occasional commutation. It is a country where both public and private means of transport are equally used by all classes of people. Car, being an important private means of transportation, is growing its importance as it is available at comparatively cheaper value may it be second-hand cars or new cars and the expenses of maintenance have also reduced. Regular costs mainly include fuel costs and insurance.
Yes, you heard it right. Insurance is an important aspect if you own a car. It is mandatory to have a valid car insurance policy
or at least third-party insurance as per legal provisions.
Various questions related to insurance arise in the minds of owners but the cost of buying a car insurance policy is the most basic concern of all. So the question is are older cars cheaper to insure or are older cars more expensive to insure? Before that, we need to have a look at the factors that affect the car insurance premium
Factors Affecting car insurance premium
The insurance premium is a combination of insurance-related, vehicle related and demographic factors. Some of them are explained as follows
Gender and age
: It is shown as per statistics that male drivers between 18 years to 25 years are more likely to be involved in an accident making this age group of owners pay a higher premium as compared to other
Place of living:
If you live in a metro city, you will attract a higher premium as compared to if you live in a village or town, basically any non-metro place.
Manufacturer and model:
The insurance companies have a chart prepared that certain cars of certain companies have registered more claims than others. This makes insuring those cars more costly.
Age of vehicle:
If you have the question, are older cars cheaper to insure, well they have lower IDVs and are cheap to insure as compared to newer cars that have higher IDVs.
From the two types of car insurance
available, third-party coverage only extends to the affected third-party in case of mishaps. Whereas, the comprehensive car insurance policy secures own damage from fires, earthquakes, floods, theft & much more. Due to a broader coverage, comprehensive plans effectively cost more than the third-party alternative but do provide better overall protection.
Certain insurance criteria are not available in the policy itself but can be added to your policy by paying an extra amount in your premium. This makes the cost of insurance go higher.
Your quotes can be determines with the help of an online car insurance premium calculator
basis all selected parameters.
Does car insurance go down as a car gets older?
The answer is yes, car insurance does go down as a car gets older. This is because the insurance premium is mainly dependent on the Insured Declared Value(IDV). As the car gets older, more and more depreciation is applied on the car and the IDV reduces making the premium amount go down.
What makes the car insurance premium go higher?
if your car is new, its market value is higher and has a higher IDV making it costly in the eyes of an insurance company.
Availability of parts:
Some cars have parts that are not so easily available or are to be imported from foreign countries. In case of an accident, the cost of replacement will be higher hence the premium will be higher.
Theft prone area:
If you live in an area where robberies occur quite frequently then the chances are higher of your car or its spare parts getting stolen and the insurance company compensates this risk by charging a higher amount of premium from you.
The security system in cars:
If your car has the latest security system installed then the insurance company will consider it as a benefit as chances are that your car will not be stolen. Generally, new cars enjoy this benefit.
Chances of breakdown:
If your car is in good condition then the chances of getting a sudden breakdown making you claim the insurance are less and hence the premium amount is also on the lower side. But if your car is not in great condition, it is susceptible to more premium
Here it is stated that older cars are comparatively cheaper to insure. Does this include vintage cars too?
No, older cars are more expensive to insure if you mean classic and vintage cars by the meaning of older cars. This is because of their vintage value and lack of availability of parts.
How can one bring down insurance premiums for older cars?
You can be benefitted in terms of insurance premium from ‘No Claim Bonus’, opting for a voluntary deductible and by doing comparisons amongst various policies online
Is it possible to cover add-ons in a car insurance policy taken for an older car?
Yes, you can easily opt for add-ons on the car insurance policy taken for older cars. However, the criteria need to be checked for certain add-ons that have a limit on the age of the car if you are willing to opt for those add-ons.