Here’s What You Need to Consider When Purchasing a New Vehicle in Mississauga
Purchasing a new vehicle can often be an exciting experience, however, there is a lot to consider besides just what your first road trip is going to be.
Inhalton.com recently caught up with Matt Hands, Senior Business Unit Manager of Insurance at Ratehub.ca, to discuss exactly what people need to be considering. And, according to Hands, one very important, but often overlooked, factor that should be considered is insurance.
So, what should people consider first when planning to purchase a new vehicle?
"The first thing they really should consider is their monthly budget, so what can I afford," Hands said. "That means they should be going through what the potential car payments could be, their gas usage, any maintenance fees that could occur from car ownership, this would also include their insurance which is probably their second-largest expense behind the car payments. In terms of the car ownership, when you're making your monthly budget, you should be factoring in all your other expenses as well."
Another important factor that should be considered is the make and model of the vehicle you're planning to purchase. The vehicle's make and model will also play a big role when it comes to how much you will be paying in insurance.
"The first thing they're [insurance companies] going to really look at is the type of car you're looking to buy," Hands said. "So, this is the make, model, and year of the vehicle."
A few factors, pertaining to the make of the vehicle, that could increase a driver's insurance are purchasing a vehicle that has several claims associated with it, and purchasing a brand new vehicle.
"One of the biggest factors is the cost to replace the vehicle, so they'll call it the replacement cost," Hands said. "If it's a brand new vehicle, it's going to be at its highest value and therefore it's going the highest cost to replace. When I say that, we have to be sure we're comparing vehicles within the same class and price range. If you're comparing a Honda Civic to the BMW, of course the BMW is going to be more expensive to ensure."
On the other hand, when it comes to lowering insurance Hands notes that a lot of factors that people can control come into play.
"You're driving record, the number of years you've been insured - if you're a person with lots of driving experience and it's a clean record, that's going to be a positive in the minds of the insurers and they'll most likely offer you some sort of discount for clean driving behaviour," Hands said.
There are some factors, however, that cannot be controlled but work in a vehicle owner's favour.
"If you're someone who lives in an area that has high levels of fraud, claims, and theft, that's going to be factored in the price received and that's unfortunately something you can't control," Hands said. "If you live in an area with low levels of fraud, low levels of claims submitted, and low theft, that's going to be a positive and will be reflected."
Ratehub outlined a few other ways people can get their insurance lowered. These tips are highlighted below.
- Shop around and compare rates
- Increase your deductible - "This is the amount you have to pay when you make a claim. Generally, the higher your deductible, the lower your car insurance," Ratehub said.
- Bundle your policies
- Winter tires - according to Ratehub you can get a discount of up five per cent if winter tires are installed.
- Ask about discounts - it never hurts to ask!
When it comes to what type of vehicles are cheaper to insure, Hands said vehicles with safety features, and that are typically used by families (minivans and SUVs), and those that are not easy to steal generally will cost people less.
Now, once someone has compiled a list of a few vehicles they are interested in purchasing, there are steps they can take to estimate what insurance will cost them.
"What I recommend doing is, once you have a short list of cars you're looking to buy, I would go to, if you have insurance, your insurer and ask them to quote you for the different vehicles because they'll have your full driving profile, they'll be able to give you the most accurate rate for those vehicles," Hands said. "If you're someone who's doing a first-time buyer, use sites like Ratehub to do comparing of multiple insurance offerings for the different vehicles."
Hands also notes that Ratehub, along with the Insurance Bureau of Canada, is a great website for people to use if they want to learn more about insurance.
Are you planning to purchase a vehicle soon?
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