You might think that the owners of used vehicles are always charged lower insurance premiums. However, the converse can also be true. One reason for this may be that new vehicles come with improved safety features and are less likely to be stolen since they are equipped with anti-theft devices and GPS tracking. ServiceMarket has put together all the reasons why used vehicles might have higher car insurance premiums in Dubai compared to a new car.
Your choice of coverage
Have you decided to get third party liability coverage for the used car you just bought or are you going with a comprehensive car insurance policy? TPL is required by law, but as a general rule, you can drop comprehensive coverage for a used car. This is advised especially if the annual costs of the comprehensive car insurance policy are 10 percent more than the value of your car each year. TPL costs, though, will not be different than that of a new car since the damage a car causes in an accident doesn’t depend on its age. If you didn’t buy the used car and instead loaned or leased it, you might need to find out the coverage requirements from the lien holder.
Variables beyond the value of the car
A number of factors besides its value affect a car’s insurance premiums. When it comes to used cars, car insurance companies in Dubai look at the following:
- The car’s history: The company will look at whether the car has been rebuilt after a major accident or undergone any repairs and modifications. If it has had major repairs done, the premiums are sure to be higher.
- Availability of parts: The motor insurance companies in Dubai will have a list of cars ranked according to popularity. Cars which are more popular have parts which are easy to replace in case of an accident and therefore, cost less to the insurance company. Cars with parts that cannot be easily found in the market will be charged higher premiums.
- Safety score: Car insurance companies also look at the safety score of your car. Some vehicles such as SUVs and minivans have a higher safety score and attract safe drivers. Owners of such cars are charged lower premiums. If a car has a very low safety score, the company might even refuse coverage.
- Theft rate: Movies might have made you think otherwise, but older cars are more likely to be stolen than new ones. Thieves find it easier to disassemble them and their parts are valuable in the market.
If you are curious about which cars are the hardest to get insured in UAE, read this article. It is good to know about the factors which can affect your car insurance rates before you purchase any vehicle. Wondering if there’s a quick and easy way to find used cars in Dubai? Check out CarSwitch.com.
If the car you just purchased is an antique, it is worth way more than a new car. A standard TPL or comprehensive insurance policy will not provide enough coverage for such a valuable belonging. You will have to ask your car insurance company in Dubai if they provide collector’s insurance instead.
It might seem obvious, but a lot of people forget that they can easily get lower rates for their car, whether new or used, if they comparison shop for insurance. ServiceMarket makes this step hassle-free for you by providing free quotes from various reputable car insurance companies in Dubai.