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myth: new cars always cost more to insure

In the complex world of car insurance, blanket statements like "new cars are more expensive to insure" are practically bound to be untrue. And this myth is no exception.

In a way, the phrasing makes it a myth. Repackage it as "new cars are usually more expensive to insure," and you're suddenly much closer to the truth. But the fact is new cars don't necessarily cost more to insure than older ones. And there are several reasons why.

Make and model matter

Real estate agents have this famous mantra: "location, location, location." And if it weren't so awkward, car insurance agents might adopt "make and model, make and..." (you get the drift) as theirs.

When it comes to buying car insurance, make and model matter more than calendar year. It makes a big difference whether you drive a sleek and super-fast sports car or a midsized family sedan. Each model attracts a particular type of driver.

Insurance rates reflect the person behind the wheel. For instance, John, who drives an older Porsche at super speeds, could pay more on car insurance than Jim, who drives a hot-off-the-assembly-line Toyota Sienna. And if John made significant performance- and/or appearance-enhancing modifications to his Porsche, his rate can climb even higher.

Is it a favorite among car thieves?

When calculating rates, car insurance companies look at how often a car is stolen. Believe it or not, last year’s Escalade fails to top this “what’s hot” chart.

Instead, the most-stolen cars are models with parts that haven't changed much over the years. Why? Because people steal cars to strip them and sell off the parts. That's why year after year the most-stolen chart toppers include mid-90s Accords and Civics, early-90s Camrys, and slightly later F-150s.

Since the risk of theft is higher, car insurance companies may bump up the rates on oft-stolen models.

Safety counts

This is undoubtedly the most dramatic difference between new and old car models. Just think back to when your car's one and only safety feature was its seat belts. Fast forward to the present and you have cars that know when you start to drift out of your lane and aren't afraid to do something about it.

It should come as no surprise that safety counts for car insurance companies. There's no insurer out there that doesn't offer discounts for safety-feature-loaded vehicles and it's unlikely that a '95 Mitsubishi Spyder will help you net those discounts. Your 2012 Jetta, on the other hand, almost certainly will.

Car insurance companies, not to be left behind in the technology sweepstakes, have also started taking advantage of telematic devices like OnStar® to actually track driver safety and price policies accordingly. A brand-new car will have all the technology it needs to help you take advantage of such offers. A classic Bug? Not so much.

Advancements in car safety aren't limited to nifty new gadgets. Overall crashworthiness has improved rapidly as car manufacturers implement more stringent testing and design new models with crashworthiness in mind. Improved crumple-zone design redistributes crash energy, and in-car systems like side, driver, and passenger air bags respond more efficiently to crashes.

The cost to repair and find replacement parts

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Two other intimately related factors make your new car cheaper to insure than an older model: repair cost and replacement cost.

Repair

As particular model lines age, their parts can get harder and harder to find. While popular models might see original and aftermarket parts manufacturers replicating their equipment in droves, less popular lines might not receive the same attention. The difficulty involved in finding suitable replacement parts can drive up the cost of repairs, and thus, the cost to insure.

Replacement

Sure, it probably won't cost more than a couple grand to replace a '91 Honda Civic. But what about that '91 Bentley Continental R? The price to replace such a fine luxury car can make the cost to replace even a current model-year sedan look paltry.

You and your car insurance

In the end, your driving history and the coverage options you select impact your car insurance rate more than your car's model year. A driver with a superb record behind the wheel of a brand-new sedan may well pay less than an oft-ticketed motorist with an older model of the same car. Plus, you have to consider the coverage options — a brand-new car might cost less to insure if you buy nothing but state-mandated liability.

Older cars can cost more to insure

The number of factors that go into determining your car insurance — not to mention the complexity of each factor — means that you can't say that a new car will always be more expensive to insure. If you're comparing a brand-new Mustang with an older model of the same car driven by the same person, the old myth may ring true. But it might not, especially if that older model can claim classic status, has been extensively modified, or lacks modern safety and antitheft devices.

So don't let the old saw limit your car-buying options. Remember the car insurance buyers' mantra — "compare, compare, compare" — and you'll be on your way to finding a new car that doesn't cost an arm and a leg to insure.

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