Before You Buy A Car - Compare Insurance Costs

Buying a car entails a big investment, a commitment of financial resources exceeded in value only by your house. It is also an emotional investment because it often is the fulfilment of an image of yourself that you’d like to project. Because a car takes up so much of your finances and your image, you must consider it a necessity to cover the risks of owning a car with adequate insurance.

In your process of selection, you should make sure that before you buy a car you must compare insurance costs. As a prudent vehicle owner, you will want insurance cover for the car to protect you against claims for damages from other persons, in case of an accident, and against losses you might incur from accidents, theft and other risks to your car. Also, shop around and compare insurance costs, to ensure that you have the best cost-for-cover insurance deal within your means.

You should perhaps also realise that certain characteristics of cars have huge bearing on the insurance costs.

Make. It is important to find out the insurance cost of a particular car make or model before you get one. The exotic cars of French or Italian make usually are more expensive to repair, as dealers do not carry replacement parts in their inventory and will import them only when needed. The higher the repair costs for a car model, the more expensive the premium. Imported cars that have the same value as locally manufactured vehicles will generally cost about 50 percent more in insurance premiums, according to a 2007 research study by a short-term insurance company.

Model. Cars of the sporty type are more expensive to insure than the more traditional models. Sports cars tend to attract younger, more irresponsible drivers. The likelihood of getting stolen or hijacked is also higher for sporty cars than traditional cars. The higher risk of being involved in collisions or being stolen results in higher premiums.

Support chain. Some cars are sold by companies that have an extensive support chain network across the country. This means that the vehicle servicing needs of certain models can be amply provided by a plentiful supply of trained technicians well distributed nationwide. Other models will not have this kind of support. One will be easier and cheaper to service and repair, while others will not, and this cost factor will creep into the insurance costs.

Value. When you insure your car, you will have to decide the amount for which you want to insure it (e.g. market value). If you are taking a hire-purchase contract on it, you will have to make sure that if anything happens to the car there will be enough money from the settlement to cover the amount of loan still outstanding. Otherwise, if the policy payout is not sufficient, you will have to shoulder the difference, which may mean a crippling financial setback. And, even if you pay for the car with your own money, you would want to get some money back in case the inconceivable happens to it – money to pay for a replacement car or for repairs.

Other factors. You should also be aware of other factors that determine car insurance costs, such as place of overnight parking, your residence (residents of some areas may file more claims than those in other areas), security devices installed, etc. You should take the time to talk about your vehicle options and other pertinent details with the insurer or the insurance broker. You can obtain from them sensible, well-informed advice and an idea of the recurring insurance costs you will be getting into when you buy your car.