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Does Your Insurance Spike with a New Car?

Does car insurance go up with a new car? Learn why higher vehicle value, theft risks, and advanced tech lead to increased premiums, and explore steps to choose the right coverage.

  • 16 Jan 2025
  • 3 min read
  • 31 views

Most people wonder does car insurance go up with a new car. We must tell you that it’s true. Car insurance premiums often go up when you purchase a new vehicle. Several factors contribute to this increase in insurance costs.

Firstly, new cars typically have a higher market value than older vehicles. It means that in the event of an accident or total loss, the insurance company may need to pay a larger sum to replace or repair the new vehicle. Consequently, they charge higher premiums to cover this potential cost.

Secondly, new cars often come equipped with advanced safety features and technology, which can be expensive to repair or replace. While these features enhance safety, they can also increase the cost of insurance since repairing or replacing such technology can be costly.

Additionally, a brand-new car will be at a higher risk of theft than an older vehicle. It increases the risk of theft, results in higher premiums and increases the insurer’s liability at the time of claim settlement. Therefore, the insurance company factors in the elevated risk and raises the premium for new car insurance policies.

Lastly, new car owners might opt for comprehensive coverage to protect their substantial investment fully. Comprehensive coverage, including protection against theft and damage unrelated to accidents, typically comes with a higher premium.

Steps to buy car insurance for a new car

Follow these steps to obtain car insurance for your brand-new car.

Gather Vehicle Information

Collect details about your new car, including make, model, year and vehicle identification number (VIN).

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Assess Coverage Needs

Evaluate your insurance needs, considering the car’s value, usage and budget.

Shop Around for Quotes

Obtain insurance quotes from multiple providers to compare premiums and coverage options.

Consider Comprehensive Coverage

Given the higher value of a new car, consider adding comprehensive coverage to protect against theft and non-accident-related damage.

Review Deductibles

Decide on a deductible amount that aligns with your financial comfort level. A higher deductible amount can reduce your premium but increase your out-of-pocket expenses in case of a claim.

Choose a Reputable Insurer

Select an insurance company with excellent customer service and a strong financial reputation.

Finalise Coverage

After careful consideration, choose the insurance policy that best suits your needs and budget.

Review Policy Periodically

Regularly assess your insurance coverage to ensure it remains adequate for your evolving needs and make adjustments as necessary.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the relevant industry. It is advised to verify the relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.

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