When you are thinking about buying a new car you may wonder what option is better, to buy a new car or to buy a used car. One way to find an answer to this question is to figure out how much money you will need to spend on insurance for a new car compared to how much money you will need to spend on insurance for a used car. To conduct this price comparison you will want to look at the cost of required coverage and the cost of optional coverage.

Required Coverage

If you are not financing your vehicles and you intend on only taking out the insurance coverage that is required by law, then the cost of your insurance coverage is going to be similar for a new car and for a used car. This is because general liability insurance is based mainly on your driving record and where you drive. However, if the used car that you are considering doesn't have many safety features, and the new car does, then there may be a price difference. Usually car insurance agents will offer you a small discount if your car has safety features like anti-lock breaks, air bags and anti-theft devices.

Optional Coverage

If you are financing your vehicle, or if you want more coverage than just liability insurance, then the cost of insuring a new vehicle is going to generally be more than insuring a used car. First of all, the value of the new vehicle is higher so insuring its replacement value is going to be more expensive. Secondly, while it is practical to insure the replacement value of a new car, it really doesn't make sense to spend hundreds of dollars a month insuring the replacement value of a car worth under $5,000.

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