Edmunds.com Car Values – Does that Impact My Auto Insurance?

When you are purchasing a vehicle, you may consider various aspects about the vehicle including, the sticker price, the make/model, the color, and any special features you’re expecting in your next vehicle. Other issues such as, how quickly the vehicle depreciates, the estimated cost for fuel and especially, the average price for auto insurance are just as important to consider, but are often, neglected by car-buying consumers.

If you’ve narrowed down your selection to two (or three) different vehicles, but you can’t make up your mind between the two – the popular car information website, Edmunds.com provides a helpful tool. This tool is referred to as, the “True Cost to Own” and it helps consumers by providing them with information about the total cost to own a vehicle that they may be considering purchasing or that they would like to compare to their current vehicle. Not only does this tool help you to determine the total cost to own a vehicle, but it can also help you determine the cost of insurance, as well. In the following information, we’ll explain how the Edmunds.com’s TCO tool can impact your auto insurance.

Insurance companies base auto insurance premiums on the total value of the car, as well as, the cost to repair or replace it. However, not only do vehicles depreciate, but the cost of insurance can also change, considerably, as well. Insurance costs can either decrease or increase, depending on the make and model of the vehicle. For instance, according to the Edmund’s vehicle pricing tool, the insurance costs to own a 2011 Infiniti QX56 would be approximately $1,410 for the first year, $1,459 for the second year, $1,510 for the third year, $1,563 the fourth year, $1,618 the fifth year with a five-year total of $7,560 in estimated insurance costs.

The True Cost to Own tool by Edmunds.com gives consumers a breakdown of how the the vehicle’s costs can change across the span of a five-year period. This tool factors in the vehicle’s depreciation (the decrease in value). This is important information, especially in terms of insuring a vehicle – in the event that there is a sudden drop in value after the second or third year – this will be result in cheaper insurance. However, while most expenses associated with owning a vehicle tend to decrease (e.g. – financing, fees and taxes), some expenses typically increase (e.g. – maintenance and repairs).

According to Edmunds.com’s website, there are eight aspects of depreciation including, insurance premiums, taxes and fees, depreciation, interest on financing, fuel, maintenance, repairs and any possible government tax credits that might be available. A system developed by Edmund’s statisticians provides an estimated ownership cost for a five-year term. This system has also been standardized so that consumers can accurately compare the total cost and expenses for different types of vehicles.
While one vehicle may have a cheaper initial price tag – it doesn’t mean that it is the best value because it doesn’t necessarily represent the actual cost to own the vehicle. The Edmund’s Car Values tool is a helpful way to determine the overall costs to own a vehicle for five years, even in terms of finding out the estimated insurance costs for any given vehicle, as well.

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