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Are Car Insurance Rates in California Cheaper for New or Used Cars?

    3 minute read

    It’s a common misconception that your rates for car insurance in California will be lower for a used car. Insurance companies have a long list of factors that they use to determine what they’re going to charge you for car insurance, and the age of the vehicle is just one determinant. In fact, new cars are not always more expensive to insure than older cars for several reasons.

    Make and Model of Vehicle

    The make and model of your vehicle matter more than the age of the vehicle for car insurance in California, in most cases.

    Vehicle Theft Ratesbreaking in car

    If your vehicle is a prime target for car thieves, you’ll certainly pay more for car insurance. There are misconceptions about this as well, as many people think that the flashiest cars the ones most stolen. In fact, the most stolen vehicles are the ones that can be quickly stripped for parts that are compatible over multiple model years and lack the modern anti-theft systems of most vehicles sold today. So, if you buy a mid-90s Honda Accord or Honda Civic, your vehicle could be a theft target, costing you more in auto insurance each month.

    How Safe is Your Vehicle?

    Safety seems to be where new vehicles shine above older makes and models, and where you might see some significant gains in auto insurance discounts. Today’s new cars stop on their own, keep you inside your driving lane, have back-up cameras, and a host of other features designed to keep you safe. Comparatively, if you buy a classic car with just lap seat belts and no air bags, you can expect to pay more for auto insurance from a safety standpoint alone.

    Average Cost to Repair or Replace Parts

    Depending on the age of your vehicle, it might become difficult to find replacement parts, which can drive up the cost of repairs. Insurance companies look at the make and model of your vehicle and factor in both the difficulty in finding parts, their cost, and the expertise involve for repairs. In some cases, a new vehicle is cheaper to insure than a used vehicle.

    Gap Coverage for New Vehicles

    It’s possible that you can have insurance on a new vehicle that won’t fully cover a loss if your car is totaled soon after purchase. This is because car insurance in California pays the actual cash value for your vehicle and not your loan amount. Gap coverage can protect you by paying the difference so that you aren’t left paying off a loan for a non-existent vehicle.

    For example, if you still owe $20,000 on your car and it’s totaled in a crash, the insurance company might pay $15,000 actual cash value. With gap coverage, your insurer will pay the remaining $5,000 so that your loan is paid in full.

    Many factors determine auto insurance rates in California, so it’s not as simple as saying that a new vehicle will be more or less expensive than a used one. Your best bet is to shop around and compare rates to find the right car for your needs. Get an auto insurance quote now.


    The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.