Does the car year affect insurance?

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Joel Ohman
Founder, CFP®

UPDATED: Jul 20, 2018

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Here's what you need to know...

  • The year, make, and model of your vehicle are all factors in determining your premium
  • There are many other factors also including your driving record and other that you can control
  • Learn about factors that you can control to decrease your premiums and shop and compare to save

When buying insurance, many people want to know if their car year will affect insurance. The short answer to this is, “yes.”

The car make, model, and year are all equally important regarding this factor, and insurance companies ask for all of this information whenever you apply for insurance.

Compare car insurance quotes right here and stop overpaying for the coverage you need!

How the Year of your Car Affects Your Premiums


Generally speaking, newer cars will cost more to insure because they have a higher market value and resale value than older cars. They also cost more to replace if there is a total loss.

The make and model are important also because of the amount of money it would take to repair them.

Insurance companies take this repair cost into account when calculating your premium. However, the year, make, and model are only three of the factors that influence cost. There are many others.

Other Factors that Affect Your Car Insurance Premiums

Factors written on a chalkboard

In addition to the car year, make, and model, other factors affect your cost. Many of these are listed below.

  • Safety features of the car – If your car has anti-lock brakes or four-wheel-drive, you may get discounts on your premium. Airbags may also get you a few dollars off of your monthly premium depending on the company’s policies, but you should ask if any of your car’s safety features can reduce your premiums.
  • Your driving record – While you cannot predict what other drivers do, you can control how well you drive and follow safety regulations and traffic laws. If you keep your driving record clean, your rate will be lower than if you have moving violations or other points on your driving record.
  • Your demographic information – If you are between the ages of 18 and 24, you will have a higher rate than if you are 55-60, for example. An insurance company is always in the business of balancing the level of risk with the potential gain they make through premiums to stay financial solid.
  • Modifications made – If you make any modifications to your vehicle, this can affect your rates. Keep in mind that some modifications are not lawful and can end up costing you much more in insurance premiums as well as possible citations for not following the regulations for on-road vehicles.
  • Your credit report – Insurance companies often use your credit report to see if you make regular payments on your bills or to see if you have a negative credit rating. People who have trouble paying their bills tend to let insurance go first, thereby increasing the risk.

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Factors that You Can Control

In insurance, as in life, there are factors that you can control and those that you cannot control. You cannot control your age or demographics. These are things that are a part of who you are such as female, 45, and single, for example.

You have some control over where you live so you can control your geographic location. Geographic location can influence your rates due to the state insurance laws that govern that state from the insurance department of that state.

Other factors that you can control include your driving record, your commitment to making regular payments, and your credit report, all which can be improved upon with a conscious effort.

It’s good to be aware of the factors that are within your control and those that are not so that you can influence your premium payments in a positive way and get the best rates available.

Ask Questions


One of the things you should do when shopping for insurance is to ask the right questions. If you do not know the coverages that you need, tell the representative this when receiving your online quote.

They may be able to make some recommendations that will help you to save money and get the right coverages for your situation.

Remember that it is not just about the money you are spending in premiums. You also need to think about the level of risk that you have when you use your car. Do you use it for business and personal reasons?

If you use it for both, you would have a greater risk than someone who only used their car for personal use because you would drive more miles since you are also using it for business and some of this use may include long business trips that add mileage to your vehicle.

Insurance companies are not that concerned about mileage itself as they are the risk involved. The more you drive, the greater risk you have for an accident.

Shop Around and Compare to Save


Just like anything else, insurance is a commodity that you use to protect yourself from financial loss. You get insurance because you know that it will save you thousands of dollars if you have an accident.

Without insurance, you would be paying for the damages out of your pocket, including legal fees if you injure someone else or cause harm to their vehicle.

Check around and compare at least three policies and companies. Look at the fine print. Then ask questions and get a quote. The only way to find the best deal is to research several of them and compare. You’ll be glad you took the time to do it.

Get started with a rate comparison right here. Enter your zip code below to see several insurance companies side-by-side.

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