Insurance for Older Cars: Everything You Need to Know
Have you been researching insurance coverage for your vehicle? Besides factoring in how much insurance coverage you need, you also don't want to pay too much for insurance each month. Getting insurance for older cars takes some careful research. Knowing what is required and what each type of insurance policy covers can help you choose the best policy.
Is Insurance for Older Cars More Expensive?
A common misconception is that newer cars are always the most expensive to insure. While newer cars will cost more to replace, an exception exists for some older cars. This point is especially true of older cars with expensive, after-market parts or those that are more difficult to repair or replace.
Additionally, many newer vehicles are eligible for discounts. Older cars are less likely to have safety features or be eligible for these same insurance discounts. If you drive a classic car, then you may end up paying higher rates.
Do I Need Full Coverage for an Older Car?
Comprehensive coverage is usually not required by states. The value of your vehicle will dictate whether you need comprehensive coverage. If your vehicle is older and is not worth as much, you may be able to reduce your insurance premium by avoiding comprehensive and collision coverage.
However, if you have a loan on the vehicle or drive a leased vehicle, you may be required to have comprehensive coverage. Lenders often want to protect their investment and require this comprehensive coverage to do so. According to ValuePenguin, if your vehicle is 10 years old or older, you may be paying too much for insurance if you have comprehensive or collision coverage. The average cost of comprehensive coverage is $134 per year, and the average cost of collision insurance is $290 per year.
Of course, you should check the laws in your state before choosing which type of insurance you need. Liability insurance, which covers damages to another driver's vehicle if you are at fault in an accident, is required in each state. The rates for liability insurance tend to be much cheaper than a full-coverage insurance policy.
Other insurance types that a full-coverage policy may cover include uninsured motorist coverage, medical payments coverage, comprehensive coverage, and collision coverage. Other add-ons may also be available, including emergency roadside service, towing coverage, and rental car coverage.
What Goes Into Calculating Insurance for an Older Car?
The cost of insurance for an older car can vary, depending on many factors. The following factors have the biggest influence on insurance rates:
- Insurance provider.
- Level of insurance coverage.
- Driver's age.
- Driver's history.
These factors are considered more than the age of the vehicle. Additionally, different insurance providers calculate these factors differently, so it pays to request multiple insurance quotes.
How to Get the Best Insurance Rate for Older Cars
Get the best insurance rate for an older car by following the tips below:
- Consider your premium: Your insurance premium is the amount you pay each month. Premiums do not usually vary based only on the age of the vehicle.
- Equip your vehicle with anti-theft devices: Some older cars are more at risk of theft because they can be easier to break into without good safety and anti-theft features. According to WalletHub, the most commonly stolen vehicles are the 1998 Honda Civic, the 1997 Honda Accord, the 2006 Ford F-150, the 2004 Chevrolet Silverado, and the 2017 Toyota Camry.
- Consider repair and replacement costs: Older vehicles can cost more to insure because they can be more expensive to repair due to hard-to-find parts. Consider how much you'll need to spend to make repairs to your older car.
- Consider gap insurance: A gap insurance plan can help if your insurance policy does not cover your car's full value. Gap insurance can make up the difference between the value and the amount that you owe.
- 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. However, you will have to pay a larger amount out of pocket if you are in an accident.
While taking out a minimum insurance policy can be a good way to save money, you want to ensure that you have enough insurance coverage. Some drivers may choose to go with a full-coverage policy that includes comprehensive and collision initially and reconsider their needs as their vehicles get older. As the vehicle value decreases, you may be able to adjust your insurance.
The best way to get good insurance rates for an older car is to ask for multiple car insurance quotes. Obtain price quotes from multiple providers and pay close attention to the coverage level that each one offers. Be sure to compare these quotes to your state's insurance minimums to ensure that you have the correct legally required insurance level for your vehicle. While a no-fault or minimum insurance policy can save you money each month, this policy type does not cover vehicle damages if you are in an accident. Instead, this policy only covers vehicle damages for the other driver.
How to Insure a Classic Car
Even if your older car is considered a classic car, you may be able to save on your insurance rates. As noted by The Balance, Progressive found that insurance for a classic car is, on average, 36 percent less than a traditional policy. Many classic car policies are designed around the driver's needs. If you have a classic car, it is even more important to do your research and identify the best insurance provider. Classic cars can be difficult to replace, and finding the right insurance coverage provider is necessary.
You don't have to go over budget to insure an older car. By considering your vehicle's value compared to the level of coverage you have on your vehicle, you can choose insurance for older cars that meets your needs.
Sources:
https://wallethub.com/answers/ci/old-car-insurance-2140714570/
https://www.valuepenguin.com/how-cost-of-car-insurance-changes-with-age-of-car
https://www.thebalance.com/best-way-to-insure-old-cars-4174480
https://www.caranddriver.com/car-insurance/a35620814/best-full-coverage-car-insurance/
https://www.caranddriver.com/car-insurance/a35292610/how-to-get-cheaper-car-insurance/
