Why the Cost of Your Insurance May Increase as Your Car Gets Older

As your car ages, you may notice that the cost of your insurance gradually increases.

This phenomenon can be attributed to several factors that insurers consider when determining premiums.

Understanding these reasons can help you anticipate changes in your insurance costs and make informed decisions about your coverage.

Repair costs, breakdown risk, safety features and changes to coverage may be key factors contributing to the rise in insurance premiums as your car ages.

Increased Repair Costs

While the value of your car decreases over time, the cost of repairs often increases. Inflation triggers increased repair costs over time. Additionally, sourcing replacement parts for older models can be more expensive and time-consuming, contributing to higher repair costs.

Insurers factor in these potential expenses when setting premiums.

Higher Risk of Breakdowns

Older cars are more likely to experience mechanical failures and breakdowns than newer models, which can lead to higher insurance premiums. Breakdowns may require roadside assistance or towing services, which insurers may cover under certain policies.

The likelihood of breakdowns can increase the risk of accidents, particularly if they occur on a busy road or in hazardous conditions.

Lack of Safety and Security Features

Newer vehicles often have advanced safety and security features such as automatic emergency braking, lane departure warning systems and advanced airbag systems.

These features reduce the likelihood of accidents and mitigate potential damages, which can result in lower insurance premiums for newer cars.

Older vehicles may lack these modern safety features, increasing the risk of accidents and injuries and subsequently impacting insurance premiums.

Policy Changes and Updates Leading to Increased Cost of Your Insurance

Insurance companies periodically review and adjust their underwriting guidelines and pricing structures based on market trends, claims data and regulatory changes. These updates can affect insurance premiums for all policyholders, including those with older vehicles.

Changes in the insurance market or regulatory environment may lead to premium adjustments.

Discuss your options with your agent if you drive an older vehicle and have full coverage insurance. In some cases, when a vehicle is paid off, paying for comprehensive and collision coverage on a vehicle with a lower value makes no sense.

Your agent can help determine whether you should have full coverage auto insurance on an older car.

Contact Us

Contact Atlas Insurance Services in Dallas, Texas, for personalized car insurance quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.