Does Your Car’s Year Affect Your Insurance Rates?

Last Updated on September 3, 2021

The year of your car is important. It affects the value of your car, which affects insurance rates.

If you have a 2021 model year car, then you’ll pay more for full coverage car insurance than someone with a 2011 car, all other things being equal. Newer cars tend to be worth more than older cars, which means you’ll pay more for car insurance.

Today, we’re explaining everything you need to know about how your car’s year affects your insurance rates.

How Year Impacts Car Insurance Rates

The year of your vehicle does not directly impact insurance premiums. However, the year of your vehicle can affect the value of your vehicle, which will change insurance premiums.

Generally, a newer vehicle is worth more than an older vehicle. A vehicle with a higher value will have higher car insurance premiums.

Here’s how car year could impact car insurance rates:

  • Newer cars tend to be worth more than older cars, which means the insurance company may need to pay more in a claim
  • Newer cars may have more advanced features than older cars, including features that are more expensive to repair
  • Older cars tend to have more mileage and wear and tear than newer vehicles, reducing the value of the vehicle further, which drops insurance premiums
  • All other things being equal (like mileage and safety features), older cars will have higher insurance premiums than newer cars

Because of these factors, the year of your car will indirectly impact insurance premiums. Year is one of many factors that insurers use to determine the cost of car insurance.

Newer Vehicles Could Have Cheaper Insurance Premiums

Generally, newer cars are more valuable and have higher insurance premiums than older vehicles. However, it’s possible for a newer vehicle to have cheaper premiums.

Some of the reasons a newer vehicle could have cheaper insurance premiums than an older vehicle include:

  • Newer vehicles may have more safety features than older vehicles, making them less likely to injure the driver and passengers, reducing the cost for insurance companies
  • Newer vehicles may have less mileage than older vehicles due to driving habits
  • Newer vehicles could have active and passive security systems and other features that reduce the risk of theft

For all of these reasons and more, it’s possible that your newer vehicle could have cheaper insurance premiums than your older vehicle. Generally, however, newer vehicles are more expensive to insure than older vehicles because of the difference in value.

Full Coverage Car Insurance Versus Liability Insurance

Newer cars tend to have higher full coverage car insurance premiums. However, not all drivers carry full coverage car insurance. Many drivers only carry liability insurance – especially on older vehicles.

Liability insurance premiums may be similar between vehicles, regardless of year. Liability insurance covers the cost of the other driver’s medical bills and vehicle repair costs after an accident. The value of your vehicle has little impact on liability insurance premiums.

Here are the three main components of car insurance and how year impacts each:

Liability Coverage: Consisting of bodily injury and property damage liability coverage, liability coverage covers your liabilities after an at-fault accident. If you injure another person or damage someone’s property during an accident, then your liability coverage will cover these expenses. Liability coverage is required in most states. The year of your vehicle should not significantly change your liability insurance premiums. Instead, driving habits and other risk factors impact the cost of liability coverage.

Collision Coverage: Collision coverage covers the cost of repairing your own vehicle after an accident with another vehicle. If you have a newer, more valuable vehicle, then you’ll pay higher collision coverage premiums because your vehicle is worth more money. Insurers pay to repair or replace your vehicle up to the value of your vehicle. If you have a 2021 vehicle worth $30,000, then you’ll pay more for collision coverage than you would with a 2011 vehicle worth $10,000.

Comprehensive Coverage: Comprehensive coverage covers theft, vandalism, collisions with animals, and other incidents that could damage your vehicle outside of an accident. It’s optional in all states. Insurers cover your vehicle up to its value. If your $45,000 truck with a 2022 model year gets stolen, then your insurer compensates you based on the replacement value of your vehicle. That’s why comprehensive coverage is more expensive for newer vehicles than older vehicles, all other things being equal.

If you buy full coverage car insurance, then you have liability, collision, and comprehensive coverage. With full coverage car insurance, the year of your vehicle will impact car insurance premiums, although it’s a small factor compared to driving history.

If you buy liability coverage, which is the only insurance required in most states, then you only have liability coverage. The year of your vehicle should not impact car insurance premiums, since your insurance primarily covers other people – not your own vehicle.

Vehicle Factors that Affect Car Insurance

Car insurance companies use your driving history, vehicle type, and other factors to determine the cost of car insurance.

Some of the vehicle-specific factors that affect car insurance include:

Make and Model: Your vehicle’s make and model affect the cost of car insurance. Some vehicles are luxury sports cars. Others are sensible minivans. Some vehicles have strong crash safety ratings, while others have powerful motors that make them more likely to cause a serious accident. Insurers consider the make and model of your vehicle when calculating insurance premiums.

Safety Features: Some vehicles have more extensive safety features than others. All vehicles come with standard safety features, although some vehicles have passenger airbags, strong rollover ratings, and other additional safety features. The safer a vehicle is, the less risky it is for insurers.

Security Features: Vehicles may have active and passive security features, including car alarms and remote shutdown systems. If your vehicle has security features, it’s less likely to be stolen, which means lower risk for insurers – and lower premiums for you.

Mileage: As vehicles get older, they collect more mileage. The more mileage a vehicle has, the less valuable it tends to be. Because insurers cover the value of your vehicle, mileage will impact the price of your collision and comprehensive coverage.

Other Factors that Impact Car Insurance

Your vehicle’s model year affects the value of the vehicle, which impacts car insurance. However, insurance companies use hundreds of factors to determine the price of car insurance.

Other factors that impact car insurance include:

State Laws: Each state sets different insurance laws. Some states have strict insurance laws and high insurance premiums. Other states have low limits and cheaper insurance premiums. Depending on your state, you could pay significantly more or less for car insurance.

Car Make and Model: The make and model of your vehicle affects its value, its safety rating, and more. Insurers use the make and model of your vehicle to determine its value.

Violations and Driving History: If you have a history of speeding or causing serious accidents, then you’ll pay more for car insurance than someone with a clean driving record. For most drivers, your driving history plays the biggest role in the cost of car insurance.

ZIP Code: Some locations have higher accident rates and crime rates than others. That’s why insurers use your ZIP code to determine insurance premiums.

Other Factors: Other factors that impact car insurance include your marital status, gender, credit score, annual mileage, age, and driving experience.

Final Word on Car Year and Auto Insurance

Insurers use hundreds of factors to calculate insurance premiums, including the age and value of your vehicle.

Generally, newer vehicles are worth more than older vehicles, which means you’ll pay more for collision and comprehensive coverage. However, if you only have basic liability coverage, then the age of your vehicle should have little impact on the cost of insurance.

Compare car insurance quotes online today to ensure you’re paying the cheapest rates possible based on the age of your vehicle.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
Back to Top