The New Car vs Used Car Insurance verdict depends on your driver profile and the carriers’ state-level pricing, not a blanket winner.

A new Honda CR-V hybrid and a 12-year-old Honda Civic walk into the same insurance quote tool. The new CR-V comes back $300 a year cheaper. That’s not a typo, and it’s not always the result.

Here’s the thing about new car vs used car insurance: the conventional wisdom is mostly right, and sometimes very wrong. Newer vehicles usually cost more to insure on collision and comprehensive, because the car itself is worth more. But used cars can cost more on theft coverage, more on parts, and more total when you finance the wrong used car at 72 months. The gap between new car vs used car insurance pricing is smaller than people expect, and the direction can flip depending on the model.

This guide compares this comparison the way the data actually shows it. We’ll cover what each piece of the policy costs, when the used-car premium beats the new-car premium, when it doesn’t, and how to decide what coverage to keep.

New Car vs Used Car Insurance: How the Policies Differ on Paper

The policy itself is identical. State minimums, liability limits, deductibles, optional coverages: all the same products either way. What changes is the math behind two of those products: collision and comprehensive.

Collision pays to repair or replace your car after a crash you caused. Comprehensive pays for theft, vandalism, hail, fallen branches, and animal strikes. Both pay out at the depreciated value of your car. The Insurance Information Institute notes that a standard auto policy pays the current market value of the vehicle at the time of a claim, not the price you paid for it.

That depreciation cuts both ways. A $45,000 new SUV that gets totaled in year two is still a $35,000 check the carrier might write. A $7,000 used sedan that gets totaled is a $5,000 check at most. The carrier prices the premium for what it could pay out, so newer, pricier cars run higher on collision and comp.

Liability is different. Liability pays the other person when you cause a crash. The car you drive doesn’t matter much there. What matters is your driving record, your ZIP code, and your coverage limits.

What This Coverage Decision Actually Costs in 2026

Carriers don’t publish a “new car premium” or a “used car premium” line item. But the Highway Loss Data Institute tracks how much each body type costs in collision losses per insured vehicle year, and those numbers are the closest thing to a truthful answer for insurance.

For 2022-24 model year vehicles (so, mostly newer cars), HLDI puts the average overall collision loss at $604 per insured vehicle year. Passenger cars run $737. Pickups run $533. SUVs run $562.

Those are insurer payouts, not your premium. But the premium tracks them closely. A car body type that costs the carrier $737 a year in collision claims will price higher than one that costs $533.

The bigger picture is in claim severity. Per ISO data published by the III, the average collision claim in 2024 was $5,489 and the average comprehensive claim was $2,306. Both numbers have climbed sharply since 2020 as parts and labor got more expensive.

Premium inflation has tracked the parts inflation. The Bureau of Labor Statistics’ motor vehicle insurance index, also reported by the III, rose 17.4% in 2023 and 17.8% in 2024 before slowing to 6.0% in 2025. Newer cars feel the bigger jolt because their parts cost more.

Here’s a rough way to read it for a typical full-coverage shopper:

BODY TYPE (2022-24 MODELS)	AVG COLLISION LOSS PER VEHICLE YEAR
Passenger cars	$737
SUVs	$562
Pickups	$533
All passenger vehicles	$604

Source: Highway Loss Data Institute, via Insurance Information Institute, 2022-24 model years.

When the Insurance Math Flips

This is where the easy narrative breaks. Three patterns flip the price.

The car gets stolen a lot. HLDI’s 2025 theft analysis ranks the Chevrolet Camaro ZL1 at 39 times the average vehicle theft rate for 2022-24 models. The Honda CR-V hybrid 4WD lands at 3.4 times. A used Camaro from 2018 carries a comp premium that reflects the same risk profile, often more, because older models lack the latest immobilizer tech.

By contrast, Tesla Model 3s and Model Ys post the lowest theft rates on the list, about 1 to 2 percent of the all-vehicle average. A new Tesla can have lower comp than a used pickup of the same value, which flips the usual insurance assumption on its head.

The car is older but expensive to fix. A 2014 BMW 5 Series might be worth $14,000, but the parts and labor on a fender repair haven’t gotten cheaper. Average comprehensive claim severity climbed to $2,306 in 2024, up roughly 37 percent from $1,679 a decade earlier per the same III/ISO series. Used luxury cars catch the inflation without the resale value to soften it.

The driver and the loan. If you finance a used car at 72 or 84 months with little down, the lender will require full coverage for the entire term. That can mean five or six years of paying for collision and comp on a depreciating asset. Add a higher interest rate (used loans typically price higher than new), and the total cost of ownership leans expensive.

Coverage Choices That Move Insurance More Than the Model Year

Pick the wrong coverage on the wrong car and you’ll overpay regardless of new or used. A few decisions matter more than the model year.

Gap insurance on a financed new car. A new car loses about 20 percent of its value within the first year, per the III. Total it in year two and the carrier pays the depreciated value, which can be thousands less than what you owe. Gap insurance pays the difference. The III says adding gap as an endorsement to your policy typically adds $50 to $150 a year, and the dealer’s standalone version can cost up to ten times more.

You probably need gap if you put down less than 20 percent, financed for 60 months or longer, leased the car, or rolled negative equity from a trade-in into the new loan.

Collision and comp on an older used car. The III’s rule of thumb is direct: if a car is worth less than 10 times the annual premium for that coverage, it’s not cost-effective to keep it. A $4,000 used car with an $800-a-year full-coverage premium fails that test. Drop full coverage, raise your liability limits with the savings, and bank the rest.

Liability limits. State minimums are usually too low to cover a real accident. Average bodily injury liability claims hit $28,278 in 2024 per the III. A 25/50/15 minimum policy pays a fraction of that and leaves you exposed personally. This is the same call whether you drive a new car or a used one.

Deductibles. Per the III, raising your deductible from $200 to $500 can cut collision and comprehensive cost by 15 to 30 percent, and going to $1,000 typically saves more. The math works for any car you can afford to repair out of pocket.

When Lender or Lease Rules Take the Choice Away

If the car is financed or leased, you probably don’t get to pick.

Lenders and leasing companies almost always require collision and comprehensive coverage, plus liability limits above the state minimum. The III’s overview of insuring a leased car notes that collision and comprehensive are required and gap coverage is typically built into the lease payment. Specific deductible caps are set by the leasing company, not the state.

That makes the insurance decision into a lifecycle decision. Year one through year five of a financed new car: full coverage is mandatory. Once the loan is paid, you own the choice again. A used car you bought outright gives you that choice on day one, and that flexibility is part of the financial argument for used.

About 80 percent of insured drivers carry comprehensive and 77 percent carry collision, per Triple-I’s analysis of NAIC data. That number stays roughly constant whether the car is new or used. Most drivers keep full coverage long after the loan ends.

Sometimes that’s right. Often it isn’t.

How the Sticker Price Side of the Math Plays In

Insurance is one slice of total ownership cost. The other big slice is the car itself, and the gap there has narrowed.

Used car prices spiked during the pandemic. The BLS used cars and trucks index, also reported by III, rose 26.6 percent in 2021. The market has been correcting since: the same index dropped 7.1 percent in 2023 and 6.0 percent in 2024. New cars went the opposite direction, rising 11.1 percent in 2022 before flattening out.

So a used car bought today costs less than it would have two years ago. A new car costs more. That changes the depreciation curve and the loan math.

The buying decision usually comes down to four numbers: the purchase price, the loan rate, the insurance premium, and the maintenance cost. Insurance is the most controllable of the four. A driver who shops the policy aggressively can take a $1,800 quote down to $1,200 on the same car. That’s $600 a year, which is more than most people will save by choosing one model year over another.

How to Save on Insurance

Whether you end up in the new car or the used car, the steps that move the premium are mostly the same.

1. Shop three carriers minimum. An identical driver, coverage, and car can still produce a $500 or $1,000 spread. Use a comparison tool or pull individual quotes from State Farm, Progressive, and a regional carrier. Premium gaps are wider than people assume.
2. Match your deductible to your savings account. The III pegs a jump from $200 to $500 at 15 to 30 percent off collision and comprehensive cost. A $1,000 deductible saves more. Only take it if you can write the $1,000 check after a crash.
3. Drop full coverage when the math says to. Use the III’s 10x rule. A $3,000 car with a $700 full-coverage premium is over the line. Switch to liability-only and pocket the difference.
4. Add gap if the car is new and financed. $50 to $150 a year on the policy beats $5,000 of negative equity after a totaled-car claim.
5. Re-shop every renewal. Carriers re-rate constantly. The cheapest carrier this year may not be cheapest next year. Five minutes a year is the highest-leverage thing you can do on this policy.

The right answer to “new or used” usually isn’t about insurance at all. It’s about price, loan terms, and how long you’ll keep the car. insurance only moves the total by a few hundred dollars a year. Smart shopping moves it by more.

Sources Used. – Insurance Information Institute, Facts + Statistics: Auto Insurance

• Insurance Information Institute, What is gap insurance.
• Insurance Information Institute, Nine ways to lower your auto insurance costs
• Insurance Information Institute, Insuring a leased car
• IIHS/HLDI, Camaro ZL1 tops chart of most-stolen vehicles

Fact-checked: 2026-05-09