Is it cheaper to insure an old car?
Is it cheaper to insure an old car?

Is it cheaper to insure an old car?

Calculation of your car premium insurance can be quite complicated. Besides the vehicle type, underwriters consider other factors like the statistical risks generally associated with one’s age, occupation, address and driving history.

The value of the vehicle also plays a significant role in solving this calculation. The insurance cost mostly depend on you, your car and the insurance firm involved. But in some cases, it tends to influence owner’s premium significantly, in other cases, its influence may not impact much.

For instance, a young driver premium is most likely to be determined by the statistical risk associated with their young age more than the value of their car. This is irrespective of their initial car cost of let’s say £300 or £3,000. The insurance premium is less affected by the value of the vehicle since other risks are much higher.

On the other hand, for older drivers, the value of the car tends to influence more since there are fewer risks for the underwriters to consider. And most probably these older drivers will be insuring a more valuable car.

Are older cars less expensive to insure?

Value is most likely to influence the cover you take out after evaluation. Your car value may play a significant role in deciding on which cover you take out a third party, third party fire and theft, or comprehensive car insurance.

All the insurance firms have their predefined formula, although many will hesitate to cover a high-value car unless the owner takes out a comprehensive insurance cover. It may not sound as if the package is all in owners favour but consider this question, should a claim arise and it turns out that it was your fault, would you opt to lose your vehicle?

Also to note is that the third-party policies are not always cheaper than comprehensive ones and will also not give you the level of cover you are looking for.

Is it cheaper to insure a new or used car?

In the case of high-value cars
Most of the insurers in this category will demand additional security that’s over and above the manufacturers installed settings. Each of the insurers has their set procedure of doing this, but will in most cases request evidence of the tracker gadget for the van insurance.

In the case of low-value cars
Owning a lower value car does not always mean that you will obtain cheaper insurance. The risks associated with these lower-value cars like difficulty of getting older parts and the higher risk of a vehicle failure that can lead to a fatal accident may not act in favour of cheap charging insurer any time a claim arises.

How do I best estimate my car’s value?

It’s a trend by insurers and comparison sites to ask the clients to estimate the value of their car any time they apply for insurance coverage.

Again, there is no need to inflate the value of your vehicle since, in the event of a claim, the insurer uses the market value of the car while determining your cover.

The main reason why the value of the vehicle is used is to identify any unstated or unmentioned modifications on the car. For instance, when the amount of Vauxhall Corsa is quoted as £20,000, it raises more questions about the Vauxhall.

It’s quite simple nowadays, to determine the value of your car by using the many online vehicle guidelines that explain the price of vehicles in various states and some even giving depreciation estimates. One of the most popular and the mostly referred site by most insurers is Parker’s Guide.

Can you transfer insurance from one car to another?

In case you are bothered by this question, this website will help you get over it.
But for such cases, you are not required to get a new insurance policy since most insurers will allow their clients to transfer their current cover to your newly acquired vehicle.

But it’s vital to notify your insurer in case you need the terms and conditions of your cover to change. Lack of harmonising the policy may lead to invalidation, rejection of future claims, or paid at much-reduced levels if you are lucky.

Will you be charged?

Yes, most insurers charge a fee to amend the terms cover. But this should include a clause in the terms and conditions of the policy.

The fee is mostly estimated to be at least £25. But for those transferring to a high-value vehicle, you may have to pay more for your premium due to the extra risk the insurer have to account for.

NB: if what you’re charged for amending the policy tends to be unreasonably high, it’s advisable to talk to your insurer about it. If they give unsatisfying feedback, you can always forward your concern to Financial Ombudsman Service.

But it’s important always to note that if there exist any material changes affecting your cover, inform the insurer immediately, not during the transfers or at renewal. Such changes include; address change, any vehicle modification, driving conviction etc.

How do I transfer my policy to a new car?

For those with an existing policy it’s simple, call your insurer. Acquired a new vehicle with ’15’ plates? Secured a secondhand bargain at the critical financial time of the year?

The standard amendment fee should be in a clause in your policy’s term and condition, but the insurer should also give you the same over the phone. And after you have provided all the necessary details of the new car, the insurer should contain the actual cost of changing your cover. If happy make the payments and wait for your new policy.

Do I have to stick with the same insurer?

No. But mostly it turns out to be cheaper to stick with your existing insurer and pay the policy transferring charge fee when you buy a new car. It is mainly because the cost of policy cancellation to start a new one will in most cases outdo admin fee. But if the policy is about to run out, you can go for a rival insurer policy instead of paying the admin fee. Very reasonable decision especially when your insurer wants to up your insurer wants to up your premium due to the type of car you’re going for.

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