Why is "how long I've owned the car" (for newer one) pushing my insurance premium up?

ThursdaysChild

I have a 5 and a half year old car (61 reg) which I've owned for 3 years, and want to part exchange it for a newer one (14 reg or similar) before things start to go wrong.

Now, this is my ideal car so I want one exactly the same, just newer. So the one I want to buy is the same make / model and equivalent trim level, same insurance group (looked up on Parkers), just a couple of years newer. Both cars are "factory standard" with no modifications etc. It's insurance group 10 (on a scale of 1-50) so not exactly a "girl racer" car!!

However when I compare insurance quotes for the 2, I get higher premiums for the newer car which I've owned for "0" years (as I would have just bought it) compared to the current car I've owned for 3 years.

That's the only thing that's different, as I have declared the same age/postcode/claim history (1 non-fault claim in the last 5 years) etc.

So... why is "how long I've owned the car" such a factor in my premium?

Edited to add: (In post #11) I tried a quote with my current car as if I was about to buy it, and got the same/similar higher premiums, similar to what I am seeing for the potential new car.

graduate

This is just a guess but insurers assume that people are more likely to have an accident in a car they have just purchased and may not be familiar with driving. The quote algorithms don't know that you have owned and driven this car before.

BeenThroughItAll

The factor most influencing the cost is the fact that the newer car is... Newer.

Therefore, would cost more to replace.

Ergo, a write off would cost the insurer more - so your premium is higher.

GDB2222

ThursdaysChild wrote: »

I have a 5 and a half year old car (61 reg) which I've owned for 3 years, and want to part exchange it for a newer one before things start to go wrong.

Now, this is my ideal car so I want one exactly the same, just newer. So the one I want to buy is the same make / model and equivalent trim level, same insurance group (looked up on Parkers), just a couple of years newer. Both cars are "factory standard" with no modifications etc.

However when I compare insurance quotes for the 2, I get higher premiums for the newer car which I've owned for "0" years (as I would have just bought it) compared to the current car I've owned for 3 years.

That's the only thing that's different, as I have declared the same age/postcode/claim history (1 non-fault claim in the last 5 years) etc.

So... why is "how long I've owned the car" such a factor in my premium?

The newer car is worth more. So, if it's a write-off, the insurance company will have to pay more.

It's pretty easy to write off a car. For example, a minor collision that triggers the airbags and seatbelt tensioners will cost around £3k just to repair those items, before factoring in any bodywork damage.

ThursdaysChild

graduate wrote: »

This is just a guess but insurers assume that people are more likely to have an accident in a car they have just purchased and may not be familiar with driving. The quote algorithms don't know that you have owned and driven this car before.

Interesting - I know a couple of people who have gone years without an accident, and then were involved in one (their fault) within a few months of getting a new (different) car. Maybe there is something to it!

ThursdaysChild

BeenThroughItAll wrote: »

The factor most influencing the cost is the fact that the newer car is... Newer.

Therefore, would cost more to replace.

Ergo, a write off would cost the insurer more - so your premium is higher.

Wow, I'm surprised that write-offs are such a factor - as I assumed (maybe wrongly! :cool:) that fairly few cars are written off in accidents as I thought most accidents were 'minor' as in needing to replace a bumper due to a parking misjudgement or something like that. (And that most of the potential cost of accidents was injuries to others rather than replacing the car)

The difference I'm seeing is 20-30% for the same insurer. The car itself is worth, say, £7000 vs £4000.

Penelopa.Pitstop

Admiral told me that's because car is new to me and I don't have experience driving it and insurance will go down after some time. Guess what happened, it never goes down, it always goes up. Every year there's a different reason for higher price.

AdrianC

ThursdaysChild wrote: »

The difference I'm seeing is 20-30% for the same insurer. The car itself is worth, say, £7000 vs £4000.

20% extra premium for double the exposure to a claim for own damage? Seems like a bargain...

ThursdaysChild

AdrianC wrote: »

20% extra premium for double the exposure to a claim for own damage? Seems like a bargain...

Surely by that logic though, if I was to buy a £200 old Fiesta (or whatever) I should be paying peanuts for the insurance? But I wouldn't be... (Well, I'm assuming. I haven't actually done a quote for that!)

AdrianC

ThursdaysChild wrote: »

Surely by that logic though, if I was to buy a £200 old Fiesta (or whatever) I should be paying peanuts for the insurance? But I wouldn't be... (Well, I'm assuming. I haven't actually done a quote for that!)

There are two elements to their risk.
The risk of paying for damage to your car.
The risk of paying for damage to others.

As soon as the write-off value gets close to a relatively small multiple of the excess, the exposure to repair costs for the policyholder's car is minimal.

ThursdaysChild

I just did a quote "as if" I was about to buy my current car (so 0 years ownership) and saw similarly high prices! So it really seems like it's how long I've owned it, rather than the value of the car, that's pushing it up.