How could car insurance cost more a month than the value of the car?

James: How could car insurance cost more a month than the value of the car?
Yes I’m under 21, No I don’t have a single ticket , or driving violation . How could insurance on a 500 dollar cherokee cost 290$ a month? In two months thats the value of the car! Its BS there has to be a way to get insurance for cheaper than that. Anybody know of any place? And please don’t say Classic insurance as all of them you have to be 25 or older.

Answers and Views:

Answer by rkbtoo
its not just the value of the car that matters. even a $ 500 car can kill someone cause permanent injury or extensive property damage thats why its high

Answer by hoodoorocket
It sucks to play the game don’t it? Get used to it, being an adult basically means you bend over for all the suits lined up to screw you to the end of time. Earning money to piss away before you see it is something you had better get used to. If you can’t deal then ride a bike.

It has nothing to do with the value of the car, it reflects the potential damage that your demographic in your specific area will do in a set period of time.

You are placing a bet that you won’t cause many times that amount of damage, the house accepts any bet that is at or above the amount of damage they know will happen over a large aggregate of people your age in your area. Both of you hope the house never has to pay out.

Good luck.

Answer by sensible_man
Change companies. My Son is driving a 98 Cherokee and is required to carry State insurance since he was convicted of Minor in Possession. He is 19. His payments are $ 190 a month.

Answer by the kid
Because the insurance company doesn’t give a crap about how much you paid for the car. At all. You are insured based on the amount of coverage you take plus certain demographic info.

Answer by Bill M
You pay the same price for gas and tires as everyone else, and for repairs if the car breaks down. The costs of owning a car aren’t all related to the price of the car. If you got collision insurance it would depend on the car’s value, but on a $ 500 car you’ll probably only want the minimum liability insurance required by law.

Answer by mbrcatz
With life insurance, people only EVER make one claim. You only ever die once.

With car insurance, it’s possible to make 365 claims in a year, or even more.

Not only that, but you could have a POS car like that cherokee, but that’s not what the INSURANCE is limited to paying – they’d have to pay up to $ 10,000 or $ 20,000 – or however much coverage you have – EVERY SINGLE TIME you have an accident!

For a young guy, they’re counting on you having at least one accident this year. They’re factoring that in to the price.

There IS no cheap insurance, for guys under 25. Period. Regardless of WHAT kind of car they drive.

And you’re right – none of the classic car companies will insure a driver under 25, AND, they all require that you have a REGULAR car in addition to that classic car.

Answer by PDE
With insurance, it is often the case that the policy costs more than the car did, as you are not just insuring the car. You are also protecting yourself against hitting any third party car, property or persons. You may have paid $ 500 for a car, but you need to bear in mind that if you kill someone their family could your insurer for thousands and you legally have to have that cover in place.

Answer by DER ALTE FIRZ
It is because of your age. Younger drivers ALWAYS pay a lot more for insurance. You can talk to an agent about changing the type and amount of coverage you have. However, if you are still paying for the car, the finsncing company/bank can dictate just how much insurance you must have.