Insurance for Older Cars: Everything You Need to Know (2024)

FAQs

What type of coverage should a person with an older car have? ›

The only insurance you usually need is liability coverage and, in some states, personal injury protection. Full coverage is often recommended, but it becomes much less valuable financially with an older car.

Hagerty, Grundy, American Collectors, American Modern and Heaco*ck provide the best car insurance for old cars. These companies are the best options for classic car insurance because of their fair rates, accessibility and experience in the industry.

It's usually worth dropping full coverage on an older car if its value is less than a few thousand dollars, as long as there's no loan on it. The more your car depreciates, the less you'll get from the insurance company after an accident or theft.

The older a car gets, the harder it may be to source these parts for repair, which can also drive up the cost of car insurance for older cars. Additionally, older cars may not have as many safety features as newer cars, which might increase the cost of auto insurance and reduce available discounts.

In general, auto insurance for older cars may be cheaper than insuring newer vehicles of the same make and model if the used car is cheaper to repair or replace.

Additionally, maintenance costs can quickly add up as cars age. Parts are harder to find, and labor is more time-intensive. If these concerns make you uneasy, avoid cars over 20 years old. This rule of thumb may help ensure your vehicle choice is still safe, reliable, and affordable.

Collision coverage pays for damages to your vehicle that are the result of a collision with another vehicle or a road hazard. Comprehensive coverage pays for other damages to your vehicle such as theft, vandalism, animal damage, falling tree branches and other environmental damage.

The most substantial reductions in auto insurance rates typically come as teen drivers get older, usually when they hit 18 or 19 years old. Rates continue to decline as you age, particularly once drivers pass the age of 25.

For one, if you're in an accident, repair costs for an older car tend to be higher because the parts are more scarce. That's one major reason your insurance company might charge a higher premium anticipating higher repair costs in the event of an accident.

Should I keep full coverage on my paid-off car? ›

Once you've paid your vehicle off, you're no longer subject to any insurance requirements other than your state's minimums. If you want to drop some types of coverage to save money, that's up to you. Either way, have your insurer remove the lender as a lienholder on your policy.

But when it comes to cars, owning a car well past the 10-year mark should no longer be a badge of honor. Due to safety reasons, if you have the money, you should probably start looking for a new car after a decade.

Full coverage car insurance is more expensive than a liability only policy. Another downside is that your premiums may increase after filing claims after a covered event. You can reduce costs by figuring out how much coverage you actually need.

Typically, most insurance companies determine your car insurance based on your car's age, make, and model, and safety features like a backup camera or a monitor that warns you a vehicle is in your blind spot, says Koopman.

Car insurance premiums don't automatically go down when you pay off your car, but you can probably lower your premium by dropping coverage that's no longer required. Banks and financing companies who loan you money for your car are called lienholders.

While the rule for older cars was to drop comprehensive coverage after six years or 100,000 miles, modern cars last longer and cost more to repair. Most experts now recommend keeping comprehensive insurance on your car if 10 percent of the car's market value minus the deductible exceeds the premium cost.

Put together, Toyota, Subaru, Honda, and Nissan account for half of the cars with the best resale value.

Consider minimum coverage: Some drivers with older cars may choose not to carry comprehensive or collision coverage. If your vehicle is older and not worth much, you may not need these additional coverages. Increase your deductible: Increasing your deductible can lead to cheaper monthly payments.

How many miles is too many for a used car? ›

A wary buyer should use as a general rule of thumb that most cars are driven 12,000-15,000 miles per year. If a vehicle is 10 years of age, it should have between 120,000 miles and 150,000 miles on the odometer.

The sweet spot for mileage often aligns with the average annual mileage accumulation, which hovers around 12,000 to 15,000 miles. A used car with moderate mileage, ideally below the annual average, suggests that it has been driven responsibly and not subjected to excessive wear.

When buying a car that's 10 years old or older, your primary concerns are purchase price and reliability. Don't pay more than the fair market value for that decade-old car. Additionally, pick a vehicle with a solid reputation for dependability. No car is really too old if you follow those rules.

Because the value of your car depreciates over time, the cost to replace the vehicle after an accident would be lower for your insurance company. But this doesn't mean your premium will decrease at the same depreciation rate.

Once you've paid your vehicle off, you're no longer subject to any insurance requirements other than your state's minimums. If you want to drop some types of coverage to save money, that's up to you. Either way, have your insurer remove the lender as a lienholder on your policy.

Collision insurance stops being beneficial for a consumer when the cost of the premium becomes greater than the value of the car. This is because the consumer would be paying more for the insurance than the car is worth, which is not a cost-effective decision.