Yes, newer cars are generally more expensive to insure. Newer cars are generally higher in value than older vehicles, and those newer vehicles can have higher repair costs.
The average cost of a vehicle repair reached $4,768 through the third quarter of 2025. This has been crawling upwards year over year. According to CCC Intelligent Solutions, as cars integrate more technology, diagnostic testing is becoming more and more necessary when a car experiences damage – making repairs that much more expensive.
Here’s what you need to know about having a newer vehicle, what you should expect to pay for insurance, and how to save.
Key Takeaways
- Newer cars are generally more expensive to insure because they cost more to repair or replace.
- Cameras, sensors, computers, and other technology can increase repair costs after an accident.
- Newer financed or leased vehicles typically require collision and comprehensive coverage, which can increase premiums.
- Safety and anti-theft technology may help offset some insurance costs through lower claim risks or available discounts.
- Comparing insurance rates before buying a vehicle can help you account for the car’s total cost of ownership.
Are Newer Cars More Expensive to Insure?
Generally, newer cars are more expensive to insure than older vehicles. The National Association of Insurance Commissioners (NAIC) says consumers should expect higher insurance rates for newer and higher-value cars because they cost insurers more to repair or replace.
The difference can be substantial. One industry analysis found that the average annual premium for a 2023 vehicle was $3,549, compared with $2,148 for a 2014 vehicle, a difference of about 65%. The gap narrowed for more recent model years, with a 2020 vehicle averaging $2,854 annually, about 24% less than the 2023 model.
Higher vehicle values are one reason for the difference. If a newer car is stolen or totaled, the insurer may face a larger payout than it would for an older vehicle that has already depreciated significantly. Newer vehicles can also be more expensive to repair because of their increasingly sophisticated technology.
However, age and value alone don't determine what you’ll pay. Car insurance rates can depend on factors such as your driving record, claims history, age, location, annual mileage, credit-based insurance score (where permitted), and prior insurance coverage. Your coverage limits and deductibles can also affect what you pay, according to the NAIC.
Why Newer Cars Can Cost More to Insure
Several factors can make newer cars more expensive to insure, from their higher value to the technology packed inside them.
1. Higher Replacement Costs
Newer vehicles are generally worth more than older versions of the same model. If a newer car is stolen or totaled, the insurer may have to make a larger payout based on the vehicle’s actual cash value, which can contribute to higher premiums.
2. More Expensive Repairs
Today’s vehicles often contain cameras, sensors, computers and other sophisticated components. Even relatively minor damage can require costly replacement parts, specialized labor and recalibration of safety systems, increasing the potential cost of an insurance claim.
3. More Comprehensive Coverage
Newer cars are also more likely to carry collision and comprehensive coverage, particularly when they’re financed or leased, and the lender requires it. Owners of older, paid-off vehicles may choose to carry liability coverage alone, which can make their overall premiums substantially lower.
Can Newer Cars Ever Be Cheaper to Insure?
Newer doesn't always mean more expensive to insure. Advanced safety features may help reduce the risk or severity of accidents, while anti-theft technology can reduce the risk of theft. Some insurers also offer discounts for vehicles equipped with certain safety or security features.
How Depreciation Affects Insurance Costs
Cars generally lose value as they age, which can reduce how much an insurer may have to pay if the vehicle is stolen or totaled. As a car's value declines, you may eventually want to consider whether the cost of carrying collision and comprehensive coverage still makes sense relative to the vehicle's value.
How to Save on Insurance for a Newer Car
Insurance costs can vary considerably between vehicles and insurers, so it pays to shop around. Get quotes before buying a car and compare rates from several insurers. You can also consider a higher deductible if you could comfortably afford the out-of-pocket cost after a claim, and ask about safety and anti-theft discounts. If you also insure a home, comparing the best home and car insurance bundles can help you see whether combining your policies could reduce your overall insurance costs.
It’s also worth comparing insurance quotes across different makes, models and trim levels before settling on a vehicle. Two similarly priced cars can have very different insurance costs.
Frequently Asked Questions
Conclusion
Newer cars often cost more to insure because they’re more valuable, can be more expensive to repair, and are more likely to carry collision and comprehensive coverage. However, safety technology and available discounts, such as bundling, may offset some of those costs. Getting insurance quotes before buying a vehicle can help you understand the full cost of ownership and avoid a surprise premium.
About Author
Brett Holzhauer
Brett’s perspective is shaped by the realities facing millennials and younger professionals: rising housing costs, student debt, shifting labor markets, and the growing gap between traditional financial advice and modern economic life.
He is particularly interested in opportunity cost, behavioral finance, and how technology is reshaping the way people save, spend, and invest.
A graduate of the Walter Cronkite School of Journalism and Mass Communications at Arizona State University, Brett brings editorial rigor, data fluency, and a strong consumer lens to every piece he publishes. In his off time, he is either traveling or watching college football.