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Buying a new car? Here’s how it may impact your premium

By  AAMI

Choosing a new car is as exciting as it is daunting, as it gets you thinking about more than just the price on the sticker. Your new car will probably affect your insurance premium, even though you could have the same AAMI Safe Driver Rewards®, park it in the same space, and drive the same routes. Here, we uncover the factors that could affect your premium, so you can keep them in mind when buying your new car.

You’re buying a more (or less) expensive car

Whether you’ve upgraded to a more expensive model or decided to economise, your new vehicle probably isn’t the same value as your old one. This means that the amount you need to insure your car for will change too, and that affects your premium.

You’re buying a newer (or older) vehicle

The age of your car can affect your insurance premium in several ways, and newer does not necessarily always mean more expensive. While it may make sense that an older car is worth less, resulting in a lower premium, keep in mind that it can sometimes be difficult and expensive to source parts for older cars. If your car fits into this category, you may have to pay a higher premium to cover the potential cost of repairs.

You’re buying a juiced-up race car

If you’re buying a muscle car, it’s probably going to cost more to insure than your nanna’s sedan. (Unless, of course, Nan drives an imported turbo version). However, according to our experts, it’s not just engine size that matters when it comes to calculating your premium.

AAMI Car expert Grant has worked with countless AAMI customers to help them with their policies. He says, “Until you factor in the dynamics of the car, the engine size and power means little by itself. You need to combine that with all the other dynamics of the car."

“You could buy an 88-kilowatt, four-cylinder car from the year 2000 that will outperform a 2016 built 210-kilowatt, V6 vehicle."

“Remember, just because a person is tall, it does not mean that they play basketball. It’s about the whole package. So, less engine power does not necessarily mean a lower premium.”

You’re choosing between an automatic and a manual

Buying an automatic car over a manual can also affect your insurance premium. Automatic cars can sometimes cost slightly more to buy, and thus slightly more to insure. You can find out how much your insurance may cost by getting an online quote.

Calculating insurance premiums is no easy feat. When underwriting your insurance policies, whether you opt for Comprehensive Car Insurance or Third Party Car Insurance, we make sure to consider all the factors involved, so we can do our best to give you a fair deal. That means that your age, where you park your car and how many kilometres you drive will still influence your premium, no matter what type of car you buy.

When you’re buying your next new car, try to compare your options by getting an online quote. If you need any more information on Car Insurance premiums, you can also call our hotline on 13 22 44.

Insurance issued by AAI Limited ABN 48 005 297 807 trading as AAMI. Consider the Product Disclosure Statement before making a decision about this insurance. Go to https://www.aami.com.au/policy-documents.html. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.

This article is presented by AAI Limited ABN 48 005 297 807 trading as AAMI. The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.