Car Insurance for New Car vs. Old Car: Key Differences

Imagine you just bought a shiny new car and are excited to hit the road. Being a responsible adult, you purchase insurance for your new vehicle. However, properly insuring it can come as a surprise, especially when premiums are higher for new cars than for older vehicles.

New cars have higher IDV (Insured Declared Value), faster claims, and more add-ons, making them costlier, but you also get all-round protection for your vehicle. So, understanding the differences between car insurance for new car and an old one can help you ease your surprise. So, keep reading ahead!

5 Differences between Car Insurance for New and Old: Quick Glance

Below is a table that provides you with a quick overview of how car insurance for new and old cars can be different:

Whether you own a new car or an old one, Bajaj General Car Insurance offers plans tailored to your needs. Enjoy faster claims, multiple add-ons, and reliable coverage to protect your vehicle.

Differences between Car Insurance for New and Old Explained

The detailed explanation for the table of differences between car insurance for new and old cars is as follows:

IDV

New Cars: Newer cars have a high market value, as defined by the Insured Declared Value (IDV). This makes it necessary for your vehicle to get insured. Moreover, it also leads to higher premiums for car insurance for new car.

Old Cars: Whereas, older cars depreciate at rates set by the Insurance Regulatory and Development Authority of India (IRDAI). The depreciation rates based on a vehicle’s age are: up to 6 months- 5%, 6 months to 1 year- 15%, 1 to 2 years- 20%, 2 to 3 years- 30%, 3 to 4 years- 40%, and 4 to 5 years- 50%. This leads to a lower IDV and premium.

Claim Process

New Cars: The claim process for a new car takes less time as they are easier to evaluate, and the insurer does not need to put in extra time to go through past damage to the car.

Old Cars: Whereas the claim process for older cars takes longer to finish, as the insurer takes time to analyse the damage. Moreover, the insurer might also feel the need to assign a surveyor for an inspection process, which might extend the time for claim settlement.

Add-ons Available

New Cars: When you buy car insurance for new car, there are several add-ons available for you to select from. These might include: Consumable Expenses, Zero Depreciation Cover, Engine Protector, Return to Invoice (RTI) Cover, and many more.

Old Cars: Whereas, as the car gets older, it is difficult to secure a few of the add-ons due to the car’s age. Some of the add-ons which are not available for older cars include: Zero Depreciation Cover and Return to Invoice (RTI) Cover.

Theft and Damage Risk

New Cars: Low risk associated with the car contributes to lowering of premium cost of car insurance for new car. This is because, with modern safety and advanced technology, the chances of a car being stolen or damaged decrease.

Old Cars: Whereas all old cars did not come equipped with these advanced features, which make the car a high-risk one, in turn increasing the premium.

Repair Cost

New Cars: Car insurance for new car can also cost more due to its expensive parts and high labour costs.

Old Cars: On the other hand, if you have an old car, its repair will not cost you much, since it is not a rare car whose parts are hard to find.

Which Insurance is Right for Your Car: Tips to Choose Car Insurance

Here are the 6 most important tips that you can follow while purchasing car insurance:

Identify Your Needs

Are you looking for a comprehensive plan for a new car, or do you need one for an older vehicle? Knowing your requirements makes it easier to find the right policy.

Consider Add-ons

 Check which add-ons are available with the policy. Options such as Consumable Expenses, Zero Depreciation Cover, Engine Protector, Return to Invoice (RTI) Cover, and many more can enhance your protection.

Compare Different Policies

Always remember to research thoroughly and compare different car insurance quote for new car. Do not just focus on checking the premiums; also compare the coverage and exclusions of the insurance policies.

Look at the Claim Settlement Ratio (CSR)

While buying car insurance for a new car, always check the CSR of the insurer you are choosing. A high CSR indicates higher chances of successful claim settlement, so go for the highest you can get.

With a 98.54% CSR, Bajaj General Insurance Company ensures smooth and fast claim processing. Buy your car insurance policy today and drive worry-free!

Understand the Claim Process

Try to see what the steps are for filing a claim beforehand. A smooth and simple process can save you a lot of time and reduce stress if an accident occurs.

Read the Policy Document Carefully

Finally, always go through the fine print before finalising any car insurance for new car. Understanding all of the terms and conditions prevents future surprises when you need to use your coverage.

Bottom Line

Car insurance for new car and an old car comes with several differences. Many factors, such as the car’s IDV, repair costs, safety features, and add-ons, affect the premium in different ways. New cars usually require higher coverage and additional protection options, which can make premiums costlier but offer greater security. When choosing car insurance, always consider how each factor affects your policy and coverage.

Protect your investment today with Bajaj General Insurance and get comprehensive coverage for your new car!

Frequently Asked Questions

Q1. Is it compulsory to buy car insurance for an old car?

Yes, it is compulsory to buy car insurance for old cars as well, as the Motor Vehicles Act, 1988, mandates that all vehicles in India have at least third-party insurance.

Q2. Which is better, a third-party or a comprehensive policy for a new car insurance policy?

If you are buying a new car, getting a comprehensive car insurance plan will be more beneficial for you, as it will not only protect you from third-party damage liability but will also cover the damages your car incurs.

Q3. Can I get a discount while buying car insurance for a new car?

Yes, you can get a discount while buying car insurance for new car, with No Claim Bonus (NCB). If you had car insurance and did not make a claim, you can get up to 50% off on your insurance premium amount.

Q4. Can I drive any car with comprehensive car insurance?

Yes, with the ‘Named Driver’ car insurance policy from Bajaj General Insurance, you can drive any car, and its damages will be covered.

Q5. Does comprehensive car insurance cover another driver?

Yes, comprehensive car insurance can cover another driver if they are listed in your car insurance policy document. Any of your close relatives, hired drivers, or friends can be on that list.

*Standard T&C Apply

*Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.