What is a Newer Vehicle Discount?

New vehicle discounts are available through companies including AAA and Allstate. Because of the updated safety features in newer cars lower the risk of accidents, many companies offer new vehicle discounts.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 21, 2021

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Here's what you need to know...

  • Buying a new car may qualify you for a discount on your car insurance premium
  • Safety features in a newer car may also generate savings on your car insurance policy
  • Because so many factors change when a driver gets a new vehicle, it makes sense to shop around and compare rates for coverage when buying a new car
  • Companies including AAA and Allstate offer newer vehicle discounts

Buying a new car and shopping around for new car insurance rates go hand in hand. Many drivers will even shop for low insurance rates before deciding which vehicle to buy in an effort to make a more affordable buying decision.

Whether you are in the market for a new or gently used vehicle or you have already made your purchase, you need to find the best rate possible for insurance.

There is actually a newer car discount available through some providers that can help you to save money on the cost of auto insurance.

Compare car insurance quotes today to see if there’s a company that offers you a lower rate and more discounts than you expected. Enter your ZIP code into our FREE comparison tool above to get started.

How Buying a Newer Car Affects Your Insurance Rates

Car insurance rates are heavily dependent on the type of vehicle that you buy. For example, specific details about your new or newer vehicle that can affect your insurance rates include:

  • The power of the engine
  • Its safety features
  • Its security or anti-theft features
  • Its cost to repair or replace the vehicle
  • Accident and theft statistics for the make and model in your local area

When you buy a new or newer car, most or all of these features can change, and this means that your car insurance rates may change dramatically.

You may think that buying a newer and potentially more expensive vehicle would always increase your premium, but this is not necessarily the case.

In fact, some car insurance providers offer drivers a newer car discount that can result in considerable savings on your premium. In addition, some of these other factors that influence car insurance rates could work in your favor when you trade in your car for a newer model.

Why Some Car Insurance Companies Offer a Newer Car Discount

When car insurance companies determine your premium amount, they analyze their overall risk of insuring you.

While the repair and replacement cost of newer vehicles may be higher in some cases, note that there are many advanced safety features and security features found in many new models today.

You may be statistically less likely to be in an accident and file a claim when you drive a newer car.

More than that, drivers today are often focused on buying a car that is fuel efficient rather than the most powerful vehicle on the road. Some models may have reduced acceleration rates, and this is a key component that affects safety risk on the road as well.

Car insurance companies understand that drivers who have newer vehicles may be statistically less like to be involved in an accident because of these points.

Some providers may pass on their perceived financial benefit for the reduced risk in the form of a discount on your own car insurance policy.

Finding a More Affordable Car to Insure

The safety features in your newer car will play a key role in the cost of your coverage, and some providers offer additional discounts for the specific features in a car. For example, you may qualify for a car insurance discount if your car has these or other safety features:

Safety features are only one aspect to consider if you are looking for a safer car to insure. You can also look for a car that has a more affordable replacement value and a car that is more affordable to repair.

Choose a less powerful engine if you want to keep insurance costs low as well.

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How to Find a Newer Car Discount

Even when you take these steps to buy a safe car that is more affordable to insure, you may benefit from additional savings through a newer car discount.

Because not every provider offers this type of auto insurance discount, you may consider asking your current provider for a quote for coverage and about the availability of this discount.

In addition, shop around to compare rates with a few other leading providers that offer the discount. You can usually learn about the types of discounts offered by a car insurance company by looking at their website.

Selecting a Great Car Insurance Company

While you want to get a great rate on car insurance, you also want to work with a provider that has great customer service and that will not hassle you when you need to file a claim.

Before you start requesting quotes for coverage that has a newer car discount on it, look at the financial ratings of various providers online.

You can also read consumer reviews about different providers to guide your decision-making process.

Setting Your Coverage Terms

After you determine which providers you want to request quotes from, you must then decide the coverage types and limits to request quotes for.

You may be inclined to buy the most affordable coverage available, but it may be beneficial to buy the most protective policy that you can afford and that meets your needs.

Learn more about different coverage requirements that you must meet as well as the benefits of optional coverages that are available to you. Seek advice from a reputable insurance agent regarding the need to increase your coverage limits to a higher level.

Remember that it is easier to find the best quote on insurance when you request quotes for similar coverage types and limits from each provider.

When to Start Looking for a Newer Car Discount

As you can see, there is a wide range of factors that influence your rates for new or newer car insurance, including the qualification for a newer car discount available through some providers.

If you want to save as much money as possible on your car insurance policy, a smart idea is to start shopping around for great rates on car insurance and comparing discounts available before you decide which car to buy.

By doing so, you can find a vehicle that qualifies for more affordable car insurance rates. Enter your ZIP code below to begin comparing today.

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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