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Do I Need Comprehensive & Collision Insurance on an Old Car?

By Jarrod Heil

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There are a few times in everyone’s life when they must debate between riding their vehicle out until it just can’t putter around or the repair expenses exceed the cost of the vehicle’s value and becoming a proud owner of a brand new or new-to-you vehicle.

For those of us in the former category, proud to go the speed limit in the highway’s slow lane to get a few more years out of that rambunctious but reliable vehicle, there comes a time in your car’s life when dropping comprehensive and collision coverage just makes sense.

Sure, dropping comprehensive and collision coverage means your vehicle won’t be insured if you’re at fault for an auto accident, but it also means you could be saving up to 50% on your auto insurance for older cars. So let’s take a look at a few different scenarios when dropping auto insurance for older cars makes sense.
 
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Do I Need Comprehensive Insurance on an Old Car?

Depending on how old your car is, dropping auto insurance for older cars just makes sense many times. Since older cars, typically 10 years and older, aren’t worth as much as those newer vehicles on the road due to depreciation, dropping comprehensive and collision coverage is a good idea if your vehicle’s value drops to a level you feel comfortable paying out of pocket if it were totaled.

So if your older car is worth $3,000 and you feel comfortable withdrawing $3,000 from your bank account if you were at fault for an auto accident, it’s probably time to drop comprehensive and collision coverage.

Even if you don’t feel comfortable withdrawing $3,000, you must weigh your options. If your deductible is $1,000 per accident and full coverage auto insurance costs you $500 more per year than liability coverage, you’re already going to pay half of that $3,000 no matter what. If you drop comprehensive and collision coverage, you’d be saving that money for a down payment on a newer vehicle when the time comes.

However, if you drive an older car and you still owe money to your lender on it, you’re required to maintain full coverage until you pay off the loan.
 
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Comprehensive Insurance on an Old Car

Comprehensive coverage is just a small part of full coverage auto insurance. Comprehensive coverage helps pay for damage when your vehicle was involved in a non-moving accident, such as a tree falling on it due to a heavy wind storm or hail smashing the roof, windshield and hood of your vehicle.

Since comprehensive coverage protects your vehicle when it isn’t moving, and it’s much rarer that you’ll have to file a claim for comprehensive coverage, it can be the first auto coverage you drop. If you financed your vehicle, you’ll have to check with your lender before dropping comprehensive auto insurance for older cars.

Many times, if the value of the vehicle has decreased enough and you can prove your finances, your lender will gladly let you drop this coverage.
 
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Collision Insurance on Older Vehicles

Collision insurance is the trickier coverage for older vehicles because it pays for damages sustained to your own vehicle if you’re at fault in an auto accident. If you still owe money on an auto loan, you’ll need to maintain collision coverage on your vehicle until the loan is paid in full.

However, if you’re one of the lucky ones who’s paid their vehicle off, there are many times when dropping collision insurance for older cars just makes sense. We’ll go back to the $3,000 example from earlier. If that scenario applies to you, it’s probably time to drop collision coverage.

However, if your older vehicle is still worth $5,000, you may be in the grey area for dropping coverage. Let’s say your car is still worth $5,000 and you have a $500 deductible. Now let’s say that full coverage only costs $300 more per year than liability.

If you’re not comfortable shelling out $5,000 if your car was totaled, you may want to hold onto collision coverage for a few more years — or until your car depreciates to an amount you’re comfortable paying out of pocket.
 
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Are Older Cars Cheaper to Insure?

Yes, older cars are typically cheaper to insure because you may not need comprehensive and collision coverage and your vehicle’s value will surely be less than a newer car. If a car is worth less money, that means your insurance company will have to pay less if you’re involved in an accident where your vehicle sustains major or total damage.

However, your car’s age has less to do with your insurance costs than its make and model. For instance, if you’re driving a 10-year-old luxury car that’s still worth $10,000 or more, you’ll pay more for auto insurance than someone with a 10-year-old car that’s worth $3,000.

Additionally, if you drive a car that’s highly coveted by thieves, like a Honda Civic or Accord, you may pay more for insurance on older models than you would a different car brand. That’s because your vehicle has a statistically higher chance of being stolen.
 
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Getting Auto Insurance for Older Cars

Getting auto insurance for older cars is much easier than you may expect. If you think you’re paying too much for coverage on your older vehicle, simply get a fast and easy quote with Clovered to see how much you could save!
 
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