Higher car insurance prices may minimize benefits of trade-ins according to Insurance.com
CLEVELAND, Ohio (August 3, 2009) - Recent buzz about the government's CARS program prompted many consumers to consider trading in their older vehicles for newer cars. But Insurance.com warns that the additional costs of auto insurance for a new car could take a big bite out of the savings that come with owning even the most fuel-efficient cars.
Purchasing a fuel-efficient car sounds like a great deal. But, remember to get an auto insurance comparison for your new vehicle before you trade up, or you may offset the fuel-efficiency savings with higher insurance costs.
Incremental Cost of Insuring a Newer, More Fuel-Efficient Car
Trade-in: 1999 Ford Explorer 4WD (15 mpg)
Average annual cost of insurance: $1,390
Buy: 2009 Honda Civic EX (29 mpg)
Average annual cost of insurance: $2,215
Incremental cost of insurance: $825 a year
Estimated incremental 5-year cost: $3,500
While a fuel-efficient car cuts weekly gas bills immediately, it's smart to estimate your insurance costs before trading in your old car. A recent study from Women-Drivers.com shows that only 22 percent of respondents shopped for car insurance before buying their last new car. This could be a costly mistake, especially since car insurance rates have dropped to an average of $1,879 this July, according to Insurance.com's RateWatch report.
Additional auto insurance rate comparisons, based on trading a 1999 Ford Explorer 4WD:
|Car Model||Annual Insurance Rate*||Coverage Increase|
|2009 Hyundai Sonata (22 mpg)||$1,770||+ $380 year|
|2009 Toyota Corolla (25 mpg)||$1,997||+ $607 year|
|2009 Kia Spectra (27 mpg)||$2,120||+ $730 year|
|2009 Ford Focus (27 mpg)||$2,248||+ $858 year|
|2009 Chevy Cobalt (27 mpg)||$2,285||+ $895 year|
|2009 Scion tC (24 mpg)||$2,850||+ $1,460 year|
*Examples of annualized auto insurance quotes are based on the average of the lowest car insurance quotes by Insurance.com over the last 12 months. MPG comparisons are the combined miles per gallon for models with automatic transmission shown at fueleconomy.gov.
Located in Cleveland, Ohio, Insurance.com is the top online auto insurance agency in the U.S., and offers comparison auto insurance quotes consumers can buy online or by phone. By linking directly to the rating systems of fifteen top insurance companies, Insurance.com provides instant, accurate comparison rates that help consumers make smarter decisions about auto insurance. For more information, visit http://www.insurance.com.
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