If you’re shopping for a vehicle, the purchase price isn’t the only number that matters. Insurance can make a noticeable difference in your monthly ownership costs.
So, is car insurance cheaper on a used car? In most cases, yes. But vehicle age alone doesn’t determine your premium. For used vehicle buyers in Denver, Colorado, understanding what insurers consider can help you compare the real cost of owning your next car.
Why Used Cars Are Usually Cheaper to Insure
One of the biggest differences in used car vs. new car insurance cost comes down to vehicle value.
A new vehicle generally costs more to replace after a total loss. Because an insurer could potentially face a larger payout, collision and comprehensive coverage on a new vehicle may cost more than comparable coverage on an older model.
Collision and comprehensive coverage are tied to protecting the insured vehicle itself. The Insurance Information Institute notes that these coverages reflect the market value of your car and the cost of repairing it. Source: Insurance Information Institute
Used cars can also give owners more flexibility with coverage. If you finance a newer vehicle, the lender will generally require comprehensive and collision coverage. Owners of older vehicles without a loan may have the option to reduce or eliminate these coverages when they no longer make financial sense.
That doesn’t automatically mean you should drop coverage. Consider your car’s value, your deductible, and whether you could afford to replace the vehicle yourself after an accident or theft.
How Repair and Replacement Costs Affect Your Premium
Insurance companies aren’t simply asking, “Is it cheaper to insure an older car?” They’re estimating how much risk a particular vehicle presents.
Parts and repair costs can play a role. A commonly used sedan with widely available replacement parts may be relatively inexpensive to repair compared with a new model filled with cameras, sensors, radar equipment, and other sophisticated components.
That difference matters because repair costs across the industry have increased. The National Association of Insurance Commissioners reported that the average incurred loss per collision claim increased 17.6%, from $6,113 in 2021 to $7,191 in 2022. Source: National Association of Insurance Commissioners
This is one reason used vehicle buyers should look beyond the purchase price. Before you buy, get an insurance quote for the exact year, make, model, and trim you’re considering.
Why a New Car Can Sometimes Be Cheaper to Insure
A newer vehicle isn’t automatically more expensive to insure.
Modern cars often include advanced safety equipment such as automatic emergency braking, lane assistance, airbags, backup cameras, and collision-warning technology. Some insurers offer discounts for qualifying safety equipment, which can help offset the higher value of the vehicle.
Anti-theft technology can have a similar effect. Modern immobilizers, tracking systems, alarms, and other theft-prevention features can reduce certain risks. The National Association of Insurance Commissioners specifically recommends asking about discounts for safety equipment and anti-theft devices.
Some insurance companies may also offer discounts or special programs for newer vehicles. Eligibility and savings vary significantly, so compare actual quotes rather than assuming a new or used vehicle will be cheaper.
For Denver, Colorado drivers, this comparison is particularly important because insurance pricing considers far more than vehicle age. Your driving record, claims history, location, annual mileage, coverage choices, deductibles, and vehicle type can all affect premiums.
When a Used Car Can Cost More to Insure
Car insurance for used cars isn’t always cheaper. Certain used vehicles carry characteristics that can push premiums higher.
A used luxury or performance car is a good example. The purchase price may have dropped substantially through depreciation, but replacement parts, body panels, wheels, electronics, and specialized repairs can still be expensive.
Theft risk can also change the equation. If a particular make or model has a history of frequent theft claims, its age and lower market value don’t necessarily guarantee inexpensive insurance.
Then there’s liability risk. A powerful sports car or another vehicle associated with higher claim costs may receive a very different insurance quote from an ordinary used commuter car of the same age.
In other words, comparing a five-year-old sports car with a brand-new compact sedan isn’t an apples-to-apples comparison.
Compare Car Insurance Before Buying a Used Vehicle
When you’re shopping, don’t wait until after signing the paperwork to research car insurance for new cars versus used vehicles.
Ask for insurance quotes on your top two or three choices. Make sure each quote uses the same driver information, liability limits, deductibles, and optional coverage so you can make a useful comparison.
You should also consider the complete ownership picture. Purchase price, financing, expected repairs, fuel costs, maintenance, registration, depreciation, and insurance all contribute to what a vehicle really costs you.
This is especially valuable when buying an older vehicle. Saving several thousand dollars on the purchase doesn’t help as much if you choose a model with unusually high insurance premiums or expensive maintenance requirements.
Mile High Car Helper Helps Denver Used Car Buyers
Insurance is one more reason to look at the complete cost of a vehicle before you buy. The cheapest car on the lot isn’t necessarily the least expensive vehicle to own.
At Mile High Car Helper, our goal is to help Denver, Colorado drivers make informed decisions throughout vehicle ownership.
We combine the expertise of a used-car dealer, used-car sales team, and complete auto repair service center with ASE-certified technicians and transparent guidance.
Whether you’re comparing used vehicles or need an automotive maintenance service after your purchase, our team can help.
Visit Mile High Car Helper at our Acoma Street or South Broadway location in Denver, Colorado, for dependable used-car sales and auto repair with integrity.
Contact Mile High Car Helper at 303-276-0259 or reach our Facebook page.
Frequently Asked Questions
Is car insurance cheaper on a used car?
In many cases, yes. Used cars generally have lower market values, which can reduce the potential cost of collision and comprehensive claims. However, premiums also depend on the vehicle model, repair costs, theft risk, driver history, location, and coverage choices.
Why does a new car usually cost more to insure?
New vehicles typically cost more to replace after a total loss and may contain expensive cameras, sensors, electronics, and other components. Those higher replacement and repair costs can contribute to higher collision and comprehensive premiums.
Can a used car cost more to insure than a new car?
Yes. A used luxury, performance, or frequently stolen vehicle may cost more to insure than some new vehicles. Repair expenses, claim history, theft risk, and vehicle type can outweigh the effect of depreciation.
Should I drop collision and comprehensive coverage on an older car?
It depends on the vehicle’s value, your deductible, financing requirements, and your ability to replace the car yourself. Drivers should compare the cost of coverage with the financial risk they would assume by removing it.
Do safety features make new cars cheaper to insure?
They can. Some insurers offer discounts for qualifying safety or anti-theft equipment. However, sophisticated safety technology can also be expensive to repair, so drivers should compare actual quotes rather than assume a discount will make a newer vehicle cheaper to insure.
When should I get an insurance quote when buying a used car?
Get quotes before purchasing the vehicle. Request estimates for the exact year, make, model, and trim of your top choices, using consistent coverage limits and deductibles for a meaningful comparison.