Are older cars cheaper to insure?

The average cost of car insurance in the UK is currently £436 a year, according to the Association of British Insurers. For drivers aged 25 and below, the figure could be considerably higher. At the same time, over 50s with a good driving record could enjoy premiums that are well below average.

In fact, your age is one of the most significant factors that insurance companies consider when providing you with a car insurance quote. But what about the age of your vehicle? What role, if any, does your age play in the cost of your premium? Is it cheaper to insure a newer or an older car? Let’s take a look.

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How is your car insurance calculated?

In the UK, cars are organised into 50 insurance groups which are then used by insurers to work out the cost of your cover. A number of points are considered when determining which group your car falls into. These include:

• Availability and price of parts
• Performance
• Repair costs
• Price when new

Broadly speaking, the higher the group your car falls into, the more expensive your insurance will be. So, driving a car in a lower insurance group can help keep your costs lower from the start.

However, your insurance group is not all that is taken into account by insurers when determining the cost of your insurance. Other factors that might affect how much you are charged include:

• Where you live
• Your driving history and habits
• Where you park
• Your occupation

So, what about the age of your car?

Are older cars cheaper to insure?

Given that older cars are typically less valuable and more affordable, it seems natural that they’d be cheaper to insure.

It’s true that it might cost your insurance provider more to replace a newer car than an older car (except for classic or collector’s cars). This could result in higher premiums for a newer car.

But at the same time, some older cars can be difficult to get replacement parts for, which makes them more expensive to repair.

What’s more, some older cars don’t have the safety and security features of newer, modern cars. They may therefore be considered more prone to accidents and theft, and, as a result, insurers might charge higher premiums for them.

In a nutshell, because car insurance is so specific, it’s difficult to say whether older cars are cheaper to insure. The only way to find out how much insurance will cost you for a specific car is to get a quote for it.

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How can you reduce the cost of your insurance?

While driving an older car might not necessarily mean lower insurance costs, there are several ways to cut your premiums whilst keeping your vehicle protected.

1. Shop around to compare prices. You can use car insurance comparison websites like MoneySuperMarket to compare different providers across a variety of policy options to find the best cover for your needs and circumstances.
2. Only pay for the cover you need. Consider dropping any optional features that do not add any value or that do not apply to you to save on the cost of your premiums.
3. Raise your excess. In many cases, a higher excess (the amount you have to pay when making a claim) often means a lower premium.
4. Add other drivers to your policy. Adding another driver to your policy, especially an experienced driver, tells your insurer that you won’t be the only driver behind the wheel, and this could lower your premiums.
5. Consider pay as you go (PAYG) insurance. If you don’t drive that much, consider pay as you go insurance which allows you to pay only for the time you drive the car or the number of miles you drive.

For more useful tips on how to reduce your car insurance costs, head over to our insurance section where you’ll find helpful content such as how to get cheaper car insurance in the UK.