Cutting insurance premiums on cars

What are the basis of charging premiums on insurance policy

Insurance premiums depends on the government rules and jurisdiction if it is set by government or in case determined by the insurance company in accordance to a framework of regulations set by the government.

If government had not mandated the premiums then it is calculated on the basis of statistical data and predefined measures.The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims.

Those factors can include :

Car characteristics
Coverage selected (deductible, limit, covered perils),
Profile of the driver (age, gender, driving history)
Usage of the car (commute to work or not, predicted annual distance driven)

Lets take car characteristics first

Old car V/s New car

New car premiums are quite high as compared to the old cars, but that doesn't mean that you get old car premiums so low that you take out the old cars instead of new cars.See this way when a car is brand new then its value is quite high and the owner of the car will never want to bear the monetary risk of accidents and other mishappenings so the insurance company can also charge more premium because they also have to bear the big risks rather than a old car due to its value.

But old cars premiums might be more in some cases like vintage cars premiums as they are a part of antique and are to be handled very safely their value is very high for the owner and so their is more risk involved in it which results to more premiums.