Insurance is like a spare tyre. You may not require it, but not having one is not an option.

New Car Insurance vs. Used Car Insurance

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Policy Coverage

Customer Service

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Cashless Garages

At the time of a car purchase, cost is definitely one of the factors that you would consider before exploring the different options in the market. You would have a budget in mind for the purchase and you would be looking to get the best value for your money. You should also consider the cost of car insurance, as this is one of the most significant expenses that you would have to bear as a car owner.

With the growth in the used car market in India, it has become possible for people to procure the vehicle of their choice at a fraction of the cost. The procedure for buying a used car and its insurance is also hassle-free. You should know that there is a distinct difference in the cost of insuring a used vehicle and a new car.

Car Insurance Premium For New Vehicles:

You may be of the opinion that the cost of insurance for new cars are higher than that of old cars. This would seem logical, as new cars have higher market value. Some of the new vehicles may also be more expensive to repair due to the lack of availability of spare parts. However, the insurance cost of new cars are not always higher than that of old cars. There are several factors that are taken into consideration when the insurance company performs the underwriting. These factors may result in car insurance premiums that differ significantly from the base rates.

Car Insurance Premium For Used Vehicles:

If you stay in a theft-prone area, your car insurance rates will be higher. If your car has the latest security devices, your insurance premium amount will be lower. The fact that new cars are equipped with ample safety features drives down the insurance premium for these vehicles. When buying a car, you should pay special attention to the make and model, as some types of cars are highly prone to theft. This applies for the same model of used vehicles as well.

You should keep in mind that new vehicles are not targeted by thieves very often as they have a robust security system. Also, it is easier for thieves to disassemble older cars and sell the parts for profit. So, if you are planning to buy a used car, ensure that you equip it with a comprehensive car insurance policy for extensive protection.

So, here is a summary of the points discussed above:

New car insurance Used car insurance
New cars have a higher Insured Declared Value (IDV). So, the part of the premium corresponding to IDV is higher than that of used cars. Since the IDV of used cars is lower, the premium corresponding to this component is lower.
New cars will have the latest safety devices. So, these vehicles pose low risk with respect to theft. The component of the insurance premium corresponding to this factor will be lower. Used cars are targeted by thieves more often as these vehicles do not have a robust security system.
Repair of new vehicles cost more. So, insurance charges could be slightly higher. It is cheaper to repair used cars.
New cars are not prone to breakdowns and other such unexpected events that result in heavy expenses. This contributes to a lower insurance premium. Old cars are highly prone to breakdowns and total loss situations. This implies that the premium could be higher.

How Much Coverage Is Too Much?

At the time of purchase of a new car, you should ensure that you buy only the necessary coverage. This will help you in keeping the insurance rates to a minimum. The Motor Vehicles Act, 1988, mandates that all cars are insured with a third-party liability insurance policy. So, you cannot avoid buying this coverage. However, when you buy a comprehensive car insurance policy, make sure that the insurance company has not attached any add-on covers to the base plan without your consent.

Add-on covers should be bought to avail coverage against specific events, as per your requirements. So, you should opt for a rider only if you see a significant benefit from the purchase.

Car Insurance For Vintage Cars:

Choosing a motor insurance policy for an antique car is different from the process of buying one for an ordinary used car. This is primarily because a vintage car is worth more money. Insurance companies offer lower rates on the insurance premium of cars that are recognised by the Vintage and Classic Cars Club of India. Overall, the premium for the insurance of a vintage car depends on the following factors:

  • The age of the vehicle
  • The current state of the car
  • The anticipated costs that arise from repairs
  • The availability of spare parts and cost of the same
  • The total distance the car has already covered

Owners of vintage and classic cars usually buy third-party insurance coverage for these vehicles, as it is too expensive to protect them with a comprehensive insurance plan. Insurers like New India Assurance Co. Ltd. and National Insurance Company Ltd. offer insurance plans for antique cars.

How To Get The Best Insurance Policy For Our Car?

Irrespective of whether you have opted to buy a new car or a used one, it is a great idea to compare policies online. This way, you will be able to get hold of the most optimum policy that offers maximum coverage at a fixed cost. Also, remember to get sufficient coverage for your vehicle so that you do not end up in a financial crisis in the future.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

Car Insurance Reviews

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  • ICICI Lombard Car Insurance
    "Best Policy"
    0.5 5.0/5 "Blown Away!"
    I got Car insurance from Icici Lombard general insurance through As The premium amount is nominal one am satisfied with it , as it has low premium amount with cashless garages comprehensive cover with bumper to bumper coverage .Customer service and response is good . I pay it annually through online banking
    Was this review helpful? 0
    , chennai
    Reviewed on Feb 15, 2019
  • Royal Sundaram Car Insurance
    "Not satisfied with the service"
    0.5 1.0/5 "Really Bad"
    I had taken this insurance policy a while back and the experience with them has not been that good. For making the claim it had taken almost 20 days which was not good and it was not convenient. The services of then has to be improved and their customer care has to be improved and the staffs should be more responsible.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Feb 13, 2019
  • HDFC Ergo Car Insurance
    "Excellent Policy"
    0.5 3.5/5 "Pretty good"
    I had taken this insurance policy a long time back and i had been paying the premium on an annual basis. The premium amount was around 30,000 and the payment method has been simple. There has been a single claim which i had made so far and the services where very good and there has not been any difficulty faced.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Feb 13, 2019
  • Royal Sundaram Car Insurance
    "Satisfactory"
    0.5 4.5/5 "Excellent!"
    I have chosen Royal Sundaram for car insurance and done a online comparison. I have received the insurance paper. The premium was reasonable and the policy period is one year. They have good garages and also they are giving me n-number of claims can be done in a year. It is a comprehensive plan.
    Was this review helpful? 0
    , ghaziabad
    Reviewed on Feb 13, 2019
  • review Car Insurance
    "Average "
    0.5 3.0/5 "Satisfactory"
    I took my car insurance in Kotak General Insurance because I have account with them. The premium was reasonable. The claim experience was bit tough and it was not beneficiary. The customer service was good but need to improve the garages for cashless. The policy coverage was good but my experience was not satisfactory.
    Was this review helpful? 0
    , ghaziabad
    Reviewed on Feb 13, 2019
  • Shriram Car Insurance
    "Good"
    0.5 3.0/5 "Satisfactory"
    I took my car insurance in Shriram General Insurance before 3 years. Its not purchased based on the premium because one of my relative is working here. The customer service was good. The policy coverage is also good. It is a one year policy and first party insurance.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Feb 13, 2019
  • Reliance General Car Insurance
    "GOOD POLICY"
    0.5 4.0/5 "Great!"
    I have taken the car insurance policy with the RELIANCE GENERAL INSURANCE where the premium is nominal when compared to the others also the IDV value is good with this policy. They have provided the policy coverage of bumper to bumper with this policy.
    Was this review helpful? 0
    , namakkal
    Reviewed on Feb 12, 2019
  • United India Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I have taken the car insurance policy with the UNITED INDIA INSURANCE where i have no claim experience with this insurance policy. I am using it since from last 3 years where the premium is lower compared to the others along with that they offers good IDV value.
    Was this review helpful? 0
    , new delhi
    Reviewed on Feb 12, 2019
  • review Car Insurance
    "Smart protection"
    0.5 4.0/5 "Great!"
    My showroom guy issued car policy from Bharati Axa, I didn't compare the cost of the policy. Its zero depreciation plan, bumper to bumper protection is there. They give 24 hours service, road side assistance its all standard. With best IDV on my Honda I20 car.
    Was this review helpful? 0
    , thane
    Reviewed on Feb 12, 2019
  • New India Car Insurance
    "Best policy"
    0.5 5.0/5 "Blown Away!"
    I took car insurance with New India Assurance for 1 year, a premium of Rs 5000 has to be paid for this insurance policy. There was no claim experience so far with this insurance. This policy has full coverage and the customer service is very good.
    Was this review helpful? 0
    , nasik
    Reviewed on Feb 11, 2019
  • Bajaj Allianz Car Insurance
    "Its Good but they need to provide less claim settlement"
    0.5 5.0/5 "Blown Away!"
    Bajaj Allianz cost of the car policy is reasonable, last year I paid the amount of Rs. 9000, now I need to pay Rs. 10,000 it has the benefits of zero dep and two times I have claimed it, first time my front mirror got damaged then second time back bumper got damaged. Only I paid the fine of Rs. 1000. Remaining they have taken care but claim settlement value is less, it should be 100%.
    Was this review helpful? 0
    , new delhi
    Reviewed on Feb 11, 2019
  • ICICI Lombard Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    I have purchased car insurance with ICICI Lombard. The premium was less when compared to others. I am using the service for one year. It is a third party insurance and it has bumper to bumper offer with zero dep and road side assistance. I have no claim and the hard copy have not received. I paid 13K through online to purchase the policy.
    Was this review helpful? 1
    , chennai
    Reviewed on Feb 09, 2019
  • Iffco Tokio Car Insurance
    "Good"
    0.5 3.5/5 "Pretty good"
    I am having a car insurance with Iffco Tokio. There is no claim experience. I have paid almost 10K for an insurance. My car is 3 to 4 years old, I think road side assistance is available. It is a first party insurance. The online payment is okay and very tedious.
    Was this review helpful? 1
    , gurgaon
    Reviewed on Feb 09, 2019
  • HDFC Ergo Car Insurance
    "Its Good"
    0.5 4.0/5 "Great!"
    When I was with HDFC Ergo, at the time the premium was reasonable for the car insurance, I have availed comprehensive third party with zero depreciation plan. Means its covered from front bumper to back bumper. I don't have any claim. However it has the 24 hours service , road side assistance.
    Was this review helpful? 0
    , bangalore
    Reviewed on Feb 09, 2019
  • HDFC Ergo Car Insurance
    "Smart Protection"
    0.5 4.0/5 "Great!"
    I have comprehensive plan its covers 100% of vehicle parts, I have renault duster, the IDV value is based on the year that I have purchased. They insurer got tie up with many showroom and centers in my area. 24 hours service available for breakage, no claim benefits are also applicable.
    Was this review helpful? 1
    , bangalore
    Reviewed on Feb 08, 2019
  • Iffco Tokio Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    I do have a car insurance with Iffco Tokio and my car is 5 years old. This is the only insurance company who can provided me a zero dep. The customer service was good. There was no claim experience till now. They do give a reminder call at the time of renewal. It is a first party insurance. Their policy coverage is also good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Feb 08, 2019
  • Tata AIG Car Insurance
    "Need Improvement"
    0.5 4.0/5 "Great!"
    Last year I had policy from Tata Aig, the cost wise they are higher, I got 40% cheaper price in ACKO insurer for my car policy. However the benefits are same like idv and the pre pick up from t he zone, tyer claim and complete interior, zero dep, bumper to bumper benefits. Tata Aig claim percentage is low, two year back I had claim it was small accident they delayed the process, at last I got the vehicle after 15 days it was cashless I done lots of follow up.
    Was this review helpful? 0
    , bangalore
    Reviewed on Feb 07, 2019
  • HDFC Ergo Car Insurance
    "Trusted Insurer"
    0.5 5.0/5 "Blown Away!"
    Long back I had HDFC Ergo for my car, at the time they gave me best insured declared amount for my Maruthi car and the insurer got tie up with many centers. I never met any claim with them. During renewing or purchasing the plan the customer support is very helpful.
    Was this review helpful? 0
    , bangalore
    Reviewed on Feb 07, 2019
  • Bajaj Allianz Car Insurance
    "Good Experience"
    0.5 5.0/5 "Blown Away!"
    The claim process was good, the response is very good with Bajaj Allianz . My car got damaged in the first portion they done some painting, then I paid the nominal charges of Rs. 1000, remaining the insurer took care. I have VOLKSWAGEN AMEO, the premium amount was Rs.15,000 for one year. Its a normal third party insurance for my car.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Feb 07, 2019
  • National Insurance Car Insurance
    "Good"
    0.5 5.0/5 "Blown Away!"
    I had a car insurance with National insurance for one year and it was good. I had no claims with them. There was no reminder call from the customer service at the time of reasonable. The premium was okay but its quite high when compared to Bajaj Allianz.
    Was this review helpful? 0
    , ahmedabad
    Reviewed on Feb 04, 2019
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