Why Car Insurance Premiums Vary Widely

The unfair truth about car insurance premiums is that even if two people drive the same make and model of car as well as insure with the same company, its unlikely they’ll land up paying the same premium.

Reason being is that all people are different. They live and work in different areas, some youngsters with brand new hot hatchbacks and others married with kids. Vehicle insurance companies collect statistics showing the age, gender , where you live and even your financial status. All these factors will have an effect on the likelihood of your car being involved iscoroccoBoetn a car crash or being stolen, crazy isn’t it?

Secondly its obvious that a more expensive car will cost more to repair after a crash or to replace if its been stolen. Furthermore its been noticed that certain cars certain cars are easier to steal or more targeted by criminals. Its been noted in South Africa Toyotas are most popular in theft cases and nowadays thieves are even targeting fast cars.

Inherently the risk of your vehicle being stolen depends on where you live and where the car is parked, particularly overnight. A car parked in a garage behind a gate with an alarm in a complex is less likely to be stolen that one that is parked in a driveway or on a suburban street. This is why even upmarket areas can sometimes have a higher risk profile and insurers will sometimes refuse to insure a car thats parked on the street unless its fitted with an approved tracking device or alarm system.

Here’s a serious pothole in the road. While the value of your vehicle depreciates over time, the cost of spare parts goes up. Most car insurance claims are for crash damage and a bumper for an older car can cost as much as one for a new car, considerably more than it did when the car was purchased.

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