In an ideal world, you would spend all the money you have budgeted for your car on the car itself.
Once you’ve paid the set value of the car, you would ideally have a fully functional car even if it doesn’t have some of the more luxurious extras outside of maybe a radio and fan.
Only if you wanted a luxury car with all the bells and whistles would you pay high monthly rates? Leather seats, an LCD media player, and a powerful air conditioner cost money. Not for a simple car.
However, what you pay for the car itself is simply never all that you will pay for the car. Not just in terms of buying gas or wear and tear repairs but in insurance, which is always a factor to consider.
If you’re looking to spend as little as possible on car insurance, you may well think that buying the cheapest car is the best option. It certainly should be the case. But that is not always what happens.
The actual value of the car is the most basic factor when it comes to the price of insurance for your car, even if it is not necessarily the most significant factor.
Expensive cars are going to cost more to replace in case of theft or a collision that results in a write-off. Furthermore, cars that have expensive parts that need to be sourced from other countries will cost more to repair.
Your insurance provider takes this into account when settling on a premium. However, it also takes into account how likely your car is to need repairs or replacement.