I’m really puzzled by insurance rates. I have a 10-year-old car, and the premium is higher than for my new car addition.
I recently switched from Allstate’s MileWise plan, where I was paying $450 for six months for my 2014 Honda CR-V (with coverage limits of 100/300/100 and a $250 deductible for collision/comprehensive). When I moved to Progressive, I got a quote for just $320 (paid in full) with the same coverage limits, no mileage restrictions, and a discount for the Snapshot device that tracks my driving data.
I then bought a 2025 Pacifica Hybrid minivan and added it to my policy as an additional vehicle. The quote came in at $280 for six months, again paid in full, with the same coverage. I know there’s an additional car discount that will kick in, but I’m still shocked that the premium for this brand-new car is $40 less than the older one when you consider the price of the new vehicle ($50k) versus the older ($14k).
With over 10 years of driving experience in the U.S., no accidents, no claims, and a credit score above 820, I really don’t understand why the rates are structured this way. It’s just so confusing! 🧐
It can definitely be confusing when it comes to auto insurance premiums, especially when you’re seeing such a significant difference between the rates for your older car and the new one. Here are a few factors that might help clarify the situation:
Valuation Differences: Insurance companies often assess the replacement cost and potential payout for a vehicle. Since the 2025 Pacifica Hybrid is a new vehicle, it could be perceived as more valuable, yet also many manufacturers include various safety features and technologies that can reduce risks for insurers. Additionally, the higher value can mean a higher liability risk, but sometimes discounts for newer cars can offset that.
Safety Ratings and Features: Newer vehicles often come equipped with advanced safety features and technology that can reduce the likelihood of accidents. If your Pacifica Hybrid has features like automatic braking or lane departure warnings, these can lower risk and therefore decrease premiums.
Discounts and Promotions: Insurance companies frequently offer discounts for new cars, especially if they have modern safety features or are environmentally friendly. The additional car discount could also play a role in lowering your premium for the new Pacifica Hybrid. Each company has its own way of applying discounts, which might lead to the differences you’re seeing.
Market Dynamics: Insurance rates can also vary based on market conditions and how each company assesses risk. Different insurers weigh factors differently, which could account for why you receive contrasting quotes for your vehicles.
Usage and Mileage: Your previous plan had mileage restrictions, which can affect premium rates. Since Progressive doesn’t have this restriction, it might positively impact your overall premium.
Claims History and Driver Profile: Since you have an excellent driving record and high credit score, that plays in your favor when evaluating your risk as a policyholder, potentially influencing the premiums positively for the new car.
In summary, even though it might seem counterintuitive, the differences in premium rates can be attributed to a mix of vehicle valuation, safety features, discounts, and the way insurers assess risk. It might be worth discussing with your insurer for a more detailed breakdown of how they calculated the quotes!