New vs. Used Car Insurance Rate Comparison

Is it cheaper to insure a new car or a used vehicle? The answer may vary depending on make, model, and other factors.

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Insurance on a new car vs. used car

If you’re deciding between a new and used car, the price may be one of your primary considerations. In that assessment, you should consider the vehicle list pricesandthe cost to maintain and insure the cars. Let’s break down average insurance policy costs for new and used vehicles. Compare below and decide which best fits your budget.

  1. Which is cheaper to insure: used or new cars?
  2. How does car insurance change for a new vehicle versus used?
  3. How to choose the right vehicle

 

Which is cheaper to insure: a used or new car?

Because car insurance is so specific, it’s impossible to give a blanket statement regarding which is cheaper to insure. Your final rate will depend on your driving history, the make and model of the vehicle, the level of coverage, and your insurance company.

While the list price of a new vehicle is usually more expensive than that of a used car, that isn't always the case for insurance. State-of-the-art safety features, more easily replaceable parts, and other factors often contribute to the low cost-to-insure of some new cars. Your insurance premium will depend on the vehicles you're comparing — but to provide a starting point in your search, we gathered insurance data comparing a 2011 Honda Accord with a 2017 Honda Accord (methodology here).

The verdict?The used car was $105 per year cheaper to insure than the new model.

Company
New Vehicle - 6-Month Premium
Used Vehicle - 6-Month Premium
Allied
$416
$428
Erie
$352
$271
GEICO
$309
$284
Nationwide
$449
$352
Progressive
$186
$149
State Farm
$255
$188
Texas Farm Bureau
$414
$337
USAA
$333
$285
Average
$339
$287

 

If you’re set on buying a new vehicle, keep in mind potential premium differences by company. Based on our research, State Farm and GEICO offer the most competitive rates on new cars.

If we look at more vehicle ages, we see that your auto insurance rate will drop by 2.5% as your vehicle ages. Meaning, a 7-year-old vehicle is about 16% cheaper than a brand new vehicle.

chart of age of vehicle

For example, a brand new Honda Accord would cost $130 more per 6-months to insure than a 7-year-old Honda Accord.

 

Compare rates on new and used cars

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How does car insurance change on a new vehicle versus used?

Vehicles may require different coverage levels — and different levels of expense. If you acquire a new car via aloanorlease, you'll probably be required to carry additional coverage not mandated for a used vehicle. This includes minimum levels ofcollisionandcomprehensive coverage, as well as gap insurance.

 
Comprehensive and collision

These coverage options offer physical protection for your vehicle in the event of an at-fault accident. Although most states require liability insurance, comprehensive and collision coverages are only mandatory if specifically stated in your lease or loan agreement. If your vehicle is worth more than $4,000, comprehensive and collision are recommended.

 
Gap insurance, Loan/Lease Payoff

Both of these types of coverage options are specific to new vehicles. They both work to cover you if your vehicle is totaled and the payout you receive from your insurance company doesn't cover the original loan of the vehicle. For example, let’s say you obtained a $20,000 loan for a vehicle that was, unfortunately, totaled six months later. Because vehicle values depreciate rapidly, you could only receive $17,000 from your insurance company, leaving you on the hook for the $3,000 difference. Gap insurance or lease/loan payoff would help cover the difference.

 


 

How to choose the right vehicle

Ultimately, the decision between new and used comes down to personal preference. Research what to expect from your vehicle, and keep price in consideration. If you’re stuck deciding between a handful of vehicles, use The Zebra's comparison app to get car insurance quotes for each vehicle. Enter your zip code below to get started.

 

Additional resources

 

 

Compare over 200 insurance companies at once!

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