Used or Secondhand Car Insurance: Is it Still Possible?

Let's face it: having a car--whether you have a new or used one--will not guarantee you worry-free driving at all times. Accidents can happen, and it doesn't matter if it's your fault or not. Think of hospital bills, medications, disabilities, and doctor consultations--the expenses can stack up fast, and having an auto insurance can take the financial worry out of the equation.

Can your secondhand car be insured in the first place?

It's easy to get an insurance for a new vehicle, but this isn't the case for used cars. One question that's often asked is if secondhand vehicles can still be insured. There are five factors you need to look into first:

Car's Age

While it's admirable to keep an 18-year old car in good working condition, most insurance companies would often set the age limit to ten years or less. Vehicles older than that are less likely to get approved by an insurance company (or the interest rate they'll set is very high).

Vehicle Condition

The better your car's overall health, the more chances you can have it insured. What this means is that it should run smoothly and reliably on the road, without any major problems that might need expensive repairs down the line.

Repair Costs

Any car that costs more to be repaired than the actual price it will be sold in the market will be rejected by car insurance companies. For instance, if your secondhand car has parts that are available in another country, then it will cost more in repairs than buying the same part locally. When you add up all the repairs costs and deduct it from the actual market value of the used car, will there still be profit left?

Insurance companies are just like any business--and it's not good business if there's no profit gained in the end.

Risk of Being Stolen

How eye-catching is your car? If your used car is a limited-edition Porsche, then the odds of getting it stolen is higher. This increases your insurance premium, and in some cases, may even equal that of a new sedan or an SUV.

Your Lifestyle

The above statement becomes all the more true if your lifestyle is risky as well. For instance, if you park your secondhand car outside, drive fast all the time, or burn rubber everytime you drive, then you increase your vehicle's chances of getting stolen or damaged. This is a red flag to insurance companies, and will  and reject your application.

Remember, just because you have a secondhand car, it doesn't mean you can't have it insured. As long as the five factors discussed above work for you, then it's entirely possible for you to get an insurance even for your used vehicle.