When you buy a new car it’s important to make sure it carries a full range of auto insurance protection, but you can save money by reducing coverage as the vehicle ages.
Some insurance needs relate to the market value of your car and your financial comfort level in paying for repairs or replacement. As the value decreases, you should consider whether some coverages are still necessary.
Optional Car Insurance Coverage vs. Required Coverage
Understanding what is mandatory and what is optional when building your insurance policy may help you save money in the long run.
What Does a Basic Auto Policy Consist Of?
A basic auto policy consists of bodily and property damage liability, which most states require. This coverage protects you when you injure someone in a car accident or damage their car or property. Each state sets the minimum level of coverage.
Some states also require motorists to carry:
- Personal injury protection. Provides reimbursement for medical expenses for injuries to you or your passengers.
- Underinsured or uninsured motorist coverage. Kicks in when a driver with little or no coverage causes injuries or property damage. Uninsured motorist property damage coverage is not available in some states. However, it is available in states that don’t require personal injury protection or underinsured/uninsured motorist coverage.
What Are Optional Auto Coverages?
While there may be other optional coverages available, many drivers add optional collision and comprehensive coverage for added protection.
- Collision pays for repairing or replacing your car no matter who is at fault.
- Comprehensive pays for losses not caused by collisions, such as fire, theft, vandalism, animal strikes and broken glass.
While these coverages work well for newer cars, they may not make sense for older vehicles depending on your financial situation.
No matter how much coverage you have, your insurer won’t pay more than what your car is worth unless you add an additional replacement cost to your policy. Insurers often declare older vehicles to be total losses when the cost of repair exceeds their market value, noted Amy Bach, executive director of the United Policyholders insurance consumer group. In such cases:
- You receive a check equal to your car’s actual cash value, less your deductible.
- The vehicle goes to a salvage yard.
What Is Gap Insurance and Do You Need It?
Sometimes drivers owe a lender more than the actual value of their vehicle. If this is the case with your car, consider buying gap insurance. If your car is totaled, this policy will pay the difference between the actual cash value of your car and what you owe the lender.
“Anytime you have a lien, understand the fact that the insurance company will pay you what the car is worth, but your car loan may be more than that,” said Walker.
You can research how much your car is worth by contacting local auto dealers. Another way is by consulting auto buyer guides, such as the National Automobile Dealers Association or Kelley Blue Book.
When Collision and Comprehension Coverage May Be Required on Your Older Car
When you’re paying off an auto loan or leasing a vehicle, you may be required to carry collision and comprehensive coverage, in addition to liability insurance. Lenders need to protect their financial interest in your vehicle until your loan is repaid. Once you own your car free and clear, you can decide whether cost of collision and comprehensive is worthwhile.
Auto loan or lease coverage may be available in your state, which covers unpaid amounts remaining on a loan in the event of a total loss. It also covers overdue lease or loan payments, financial penalties, security deposits that are not refunded and more.
The Right Amount of Coverage for Your Older Car
If you buy collision and comprehensive coverage for a car that is at least 10 years old and you’re able to cover any repair costs out of pocket, you may be paying too much for car insurance.
Weigh what you are paying in premiums against what you are likely to get back from your insurance if your car is damaged, said Carole Walker, executive director of the Rocky Mountain Insurance Information Association.
The Cost of Comprehensive and Collision Coverages
The average yearly price of comprehensive coverage on a policy is about $134 while the average price of collision coverage is about $290 per year, according to the Insurance Information Institute. Deductibles for collision and comprehensive typically range from $250 to $500, said Walker. While taking a high deductible can reduce your car insurance rates, be sure to have the funds on hand in case you need to file a policy claim.
“If you drop comprehensive and collision on an older vehicle it can be a smart choice,” she said. “You will save on premiums but understand that you will have to pay for repairs out of pocket, if you need to file a claim.”
Many consumers choose to err on the side of caution by keeping collision and comprehensive coverage for older cars, said Bach. The piece of mind gained, may not be worth the money spent if the car is declared a total loss. According to Kiplinger, which publishes financial advice, insurers tend to declare a car to be a total loss if the cost of repair reaches 75 to 80 percent of the car’s retail value, depending on state laws.
Calculate Your Replacement Cost
Before cutting back on coverage for your older car, you should take time to figure out how much it would cost to repair or replace it if you had to cover the amount out of pocket. It may make sense for you to keep full coverage if your older car has maintained a high resale value.
Repairing older cars typically is less costly than newer vehicles, because they use less advanced technology. Replacement parts for older cars typically are less costly also.
Determine Whether Your Older Car is a Classic
Most cars lose value as they age, but in some cases older cars attain a greater value by achieving classic car status. When that happens, drivers often can find discounts by buying classic car insurance.
Classic cars generally must be at least 25 years old. You typically can find the best price on classic car insurance if you work with an agent who specializes in such policies, said Bach.
Often, insurance companies give classic car owners a price break because (typically) classic cars are:
- driven less often than most vehicles
- often pampered, and saved for special occasions
- less likely to be damaged or totaled in accidents
- kept in garages, making them less likely to be stolen
Before you buy insurance for a classic car, you may wish to have its value appraised so your policy will accurately reflect its worth. This is especially important if you have made improvements that have increased its value. Given the volatility of the car market, it’s important to have your vehicle appraised annually to ensure you’re getting an accurate value.
If you decide to store your car during harsh winter months, you can save money by suspending your coverage. Just make sure that the car is roadworthy before returning it to the highway in the spring.
Adjust Your Policy
It’s good to periodically reexamine your level of car insurance coverage. As your protection needs change, so can your policy. A good goal is to have adequate coverage, but not more insurance than you need.
A broad range of protection may be the right choice when your car is newer. As your vehicles ages and loses value, and you assess your ability to pay for damages or losses, you can avoid paying for too much coverage by dropping the policy features that no longer make financial sense.
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I traveled and my laptop was stolen is this included in my homeowners insurance. Please respond to my 2 concerns. Thank you.
I have comprehensive and collision and have had my car serviced and replaced a hose are these services covered by my insurance and do I get a refund.
T – For your questions, please give us a call at 800-423-6789 and one of our representatives would be happy to review your coverage with you. Thanks for reading Extra Mile!
I think I should reduce the amount of coverage I have on my 2015 Buick as the blue book value of it would not support full coverage any longer.
Do you agree
CJ – Give us a call at 800-423-6789 and one of our customer service representatives would be happy to review your amount of coverage with you. Thank you!
THANK YOU FOR THIS VALUABLE INFORMATION
Can I have an agent go over my car ins policy to see if there is any ways I can save on my ins premium. For instance, our car loan had been paid off in 2016, our Jeep is a 2016. So do I really need Gap ins,if I read it correctly on what you sent me. Thank you.
Charles – Please give our customer service team a call at 800-423-6789 and one of our representatives would be happy to review your policy with you. Thank you!
Thank you and I will look at evaluating my policy…This info. Is great knowledge…I’m grateful..
I canceled my comprehensive auto insurance due to the fact my Toyota with only 28,000 miles on it is 34 yrs. old, a 1989 Corolla. It is a classic and is in wonderful condition. In the event of vandalism, etc. I see in this. newsletter glass coverage, etc. I still need that comprehensive insurance.
This is a great Newsletter, thank you, I have learned so much from reading it, I also have put more insurance on my auto policy for liability and extra for medical care in the event of an accident after speaking with my Harford Insurance Agents
Thanks for reading, Nancy! We’re so glad you found this information helpful.
I own 2014 Toyota Hybrid Prius V and I am contemplating on adjusting my policy by dropping some insurance policy features that no longer worth continuing because of my financial situation – on a fixed income.
Kindly advice. Thank you.
Florencia – Please give our customer service representatives a call at 800-423-6789. They’d be happy to answer any questions about adjusting certain coverages. Thank you!
I own a 2002 Toyota Camry LE, I would like to lower my insurance. I use my car only as needed for doctor’s appointments, grocery shopping and errands once or twice a week.
Hi Vivian – To discuss coverage on your vehicle, please give our reps a call at 800-423-6789. Thanks for reading!
I need to reduce my ins costs I cant afford paying 270.00 a month I’m planning on selling ,the Dodge caravan as soon as possible .Can we redeuce the Dodges ins costs
William – To discuss your insurance costs in more detail, please contact customer service at 800-423-6789. One of our representatives would be happy to review your policy with you and discuss any discounts you may qualify for. Thanks for reading Extra Mile!
What changes would recommend for our 1995 Ford truck?
Hi Socorro – Please give us a call at 800-423-6789 and one of our representatives would be happy to review your policy and coverage with you. Thanks for reading Extra Mile!
I would like to consider lowering or dropping my collision and comprehensive insurance on my my 3 older vehicles.
Leslie – Thanks for reading Extra Mile. Please give us a call at 800-423-6789 and one of our representatives would be happy to review your policy with you.
These are all good points.
BUT my insurance rates do NOT reflect a reduction in value and potential risk for the insurer. You want me to reduce my insurance cost by cutting or dropping coverage. For the very reasons stated in this article my billed rates should be much less, but they are not. “No fault” or similar laws have given the insurance companies license to raise rates virtually at will based on rising payouts in liability cases due to not contesting cases where one driver is truly at fault. They just throw up their hands and “split” the settlement. And move on to the next claim. That philosophy raises the true cost of insurance for a good driver, dramatically.
I have a 2011 Hyundai sonata. It is kept in a garage basically I drive only in town.
I only have the minimum Ins coverage on my car, I had an accident on 4/2020. I was backing up in a 7-11 parking lot, I barely scraped my bumper & same on other car. The damage to the other car was $800, why would my Ins more than double?
Three yrs is coming up for it to go off my record, I pay $113.31 now, will my Ins payment drop considerably
Hi Jody – Thanks for reading Extra Mile. For your questions, please contact our customer service representatives at 800-423-6789.
Adjust My Policy
Please periodically reexamine my level of car insurance coverage. As my protection needs change, so can my policy cost. I need adequate coverage, but not more insurance than I need. I drive and own a 2017 Chev Malibu
I tried to get a small discount by taking the Senior Driving Class from AARP but never received any on my insurance payment………?????
Sharon – Please give us a call at 800-423-6789 and one of our customer service representatives would be happy to review this with you. Thank you!
Yes my insurance is to high even though I have a older car,l would love to save much as l can because I disabled but sometimes I can still drive to the doctor appointment, and to the store ,back home after that my car is just sitting.
I am still paying off my vehicle…would like to know how to reduce payments
Kamala – Give us a call at 800-423-6789 and one of our customer service representatives would be happy to discuss this with you along with any discounts you may qualify for.
This article about reduce coverage as vehicle ages (my 2005 suv) is really an eye-opener how much money I have wasted for many, many years! Since Covid I have been working from home, and recently Retired now, I have been carrying a Full Comprehensive, Collision, PIP, etc coverage for my 2005 suv that I only drive basically at least 1x per month (or hardly at all) and just sits inside my attached home garage!!!
Hi , I own a 2007 Lincoln Town car and drive the vehicle about three months a year. The vehicle is old and driven occasionaly.. Given these conditions what is the minimum coverage I need to carry on my vehicle.
Bernard – Please call 800-423-6789 and one of our representatives would be happy to review this with you.
As policyholders, we note appreciation to the auto insurance carrier for providing good choices, to keep proper coverage on newer vehicles, and restrict certain coverage on older units. Although we may not make changes at a current time, it is good to listen to any comments, for future choices. Thank you.
I have a2021 Subaru crosstrek. I put 5000 miles a year on my car I currently have 500 dollar deductible on collision. I am going to raise it to 1000 in july when I renew my policy. Maybe raise my comprehensive to. I am a safe driver with no tickets or accidents.
All our cars are more then 10 years old. Thank you for the information.
Prior to my renewal on our three vehicles I am going to get a quote of actual cash value and have my coverage adjusted accordingly. Thanks for this information.
I want to reevaluate my coverage.
Need to speak with representative please. We need to adjust our policy
Hi Julie – Our representatives can be reached by calling 800-423-6789. Thanks for reading Extra Mile!
I’m at the gym more then 3 times a week and on no medication at 82
I have a Mercedes 191E, 1991 model and keep it garaged. It has a few nicks but is mostly quite
respectable looking. Once in a while I drive it on short trips into Canada or Oregon, CA, etc.
During the Covid crisis it has been driven less. Since I still have to get oil changes and that seems to happen once per annum, you can see there is a minimum of driving.
I do not think my current policy carries collision or comprehensive, but would like to keep the premiums at a minimum. As my policy come due on April 4 and I renew it as a bundle with my house insurance, what do you advise for the car?
Donna – For questions about your policy, please give us a call at 800-423-6789. Thank you!
Can I get a discount taking good driver course, or is mine still affective from last time?
Zelda – Please call 800-423-6789 and one of our customer service representatives would be happy to discuss discounts with you. Thanks for reading Extra Mile.
Very informative and timely now that I am retired and no longer carry clients in my car.
I would like to drop the collision coverage and also check on the low mileage coverage. I have enclosed a repair bill from Germain Honda from 2021 and also one from Germain Honda from December 2022, which shows the mileage for the period of over a year. I have never had a speeding ticket and have a good driving record. Living in a small town, I no longer drive great distance.
Hi Myrenia – Please give us a call at 800-423-6789 and one of our representatives would be happy to review your coverage with you.
If I lower my deductible to 400.00 what will my policy cost and how much monthly?
Hi Carmeilla – To discuss your policy and insurance costs in more detail, give one of our customer service representatives a call at 800-423-6789.
Do you have Classic Car Insurance available and what would be the yearly premium for a 1998 Cadillac Eldorado ETC?
Hi Clifton – To get a quote for classic car insurance, please give us a call at 800-555-2510 or head to our online quoting tool. Thanks for reading Extra Mile!
I have a 2014 Toyota RAV4.i am semi retired, driving an average of 5,000 miles a year. I would like my insurance premium lowered.
Pam – Thanks for reading Extra Mile. For questions about rates and to review any discounts you may qualify for, please give us a call at 800-423-6789.
So after reading through the comments I have come to realize that the best thing I can do and what you will tell me to do is to call customer service and speak with the representative My insurance is due to come up around April or May so I will be calling and to see if we can get a lower price thank you for this information this was a great site
My wife is retired now and does mileage basically right in area for local needs like groceries etc. when she was working she would drive 60 miles a day to and from work.
Is there a price break for reduced driving miles?
Dale – Give us a call at 800-423-6789 and one of our representatives would be happy to review your policy with you and discuss any discounts you may qualify for. Thanks for reading!
before you consider dropping collision and comprehensive coverage find out what the replacement value of you car is. i have one that is older with a value of 115k. a second one that is 19k a third one with a value of 27k. in the last few years the values have risen significantly. plus as a former agent, there are hit and run drivers and people with no liability insurance, leaving you to pay for someone else’s mistake.
My Toyota Matrix was purchased new in 2004. I want necessary coverage for S California, however, I know the value of my vehicle has decreased. Please advise. Thank you.
Lois – For specific questions about your policy, please contact our customer service department at 800-423-6789. Thank you!
Hey thanks for posting this useful information about reduce coverage as vehicle ages, I really hope it will be helpful to many. It will help a lot; these types of content should get appreciated. I will bookmark your site; I hope to read more such informative contents in future. Appreciative content!
Thank you for this suitable article about reduce coverage as vehicle ages, it will help me and people like me looking for the same. I appreciate your effort for taking time to do your research and present these details before us. Really nice way to present this content, very appreciative!!
It’s good to know that we can reduce the amount we pay for auto insurance if we start reducing its coverage as the vehicle gets older. I’ll be buying a brand new car so I might need to have full coverage, but I guess we can take some policies that I no longer need for the following years of ownership. I’ll try to verify this fact with nearby providers of auto insurance and see what’s best for me.
I would like to determine if I should drop my coverage based on my older car.
When my car hit 10 years old my coverage was reduced. The Hartford did it themselves.
I want my 1995 Honda Civic and 2005 Hyundai Elantra considered for “Classic Car” status if it lowers my annual premiums. They’ve always been kept in my garage when not driven and now only are used for transportation to casinos. stores, medical and dental appointments.
its all about saving my money
I rave a 97 Cadillac deville and a 04ford freestar ;; I put less than 5000 miles a year on both . can my insurance be lowered? I live in pa.
My car is a 2010 Mazda CX7. It is 11 yrs old. Should I drop my coverage on it?
BECAUSE OF C19 RESTRICTIONS I HAVEN’T DRIVEN BUT A HUNDRED MILES SINCE MARCH 5TH. IS THERE A COMPANY DISCOUNT .
My daughter is driving a car that is covered by insurance in her name. However, the car is currently registered in my name. If she has an accident, could I be sued if anyone gets hurt?
Yes my van now has over 103,000 miles on it, and it is 9 years old, but I very rarely drive it now. I moved into an apt. complex and very close to stores etc, so not putting much mileage on it now, also am somewhat disabled so now can park in the handicapped spots closer to the doors of the businesses. Am hoping to get a lower cost for my insurance, my income is so low, it is a struggle to pay the high cost! When it comes time in Oct. to get it renewed, I assume you will make those allowances for me, or I might need to shop elsewhere. Thank you for reading my comment!
I have a 2012 Honda Accord and a 2000 Chevrolet S10. The 20 year old S10 has 95000 miles on it. So it is not driven very much. With the age of the S10 do you have too much insurance on the truck. I have AARP Hartford insurance
How can i reduce my insurance coverage on my Acura TL 2008 know!
I am 71yrs old and have 1 ridiculous!! speeding ticket I received ~2yrs ago
It think it’s outrageous to increase my insurance rate by 50%!!!!
I only drive to the supermarket once or twice a week.
I’ve been solicited, as everyone has,
by several insurance companies and since I’ve been living on social security for almost 20yrs now, it behooves me to consider saving money elsewhere if Hartford doesn’t reconsider my insurance rate. I can save a considerable amount of money if someone doesn’t take a look at my policy.
Many thanks, I needed this information before renewing my auto policy. Will go back and renew my coverage.
Thank you for renewing, Alberta!
I need to review my policy to to see if i can get a better rate.
Hello – Thank you for reading Extra Mile! For questions on your account, please contact our customer service center at 800.423.0567. Our agents are available Monday-Friday 7am to 11pm EST and Saturday and Sunday 8am to 6pm EST. Thank you!
This makes sense but what if we get into an accident that is our fault? My car is 17 years old and probably worth not more that $2K at this point. I’m carrying full coverage.
Do car insurance companies periodically check your credit score? As your credit score increases that should help with lowering cost. The trouble with car insurance companies checking your credit score is then your score goes down. “You can’t win for loosing!”
Hi Nancy – For questions on your account, please contact our customer service center at 800.423.0567. Our agents are available Monday-Friday 7am to 11pm EST and Saturday and Sunday 8am to 6pm EST. Thank you!
MY CAR IS A 2008 PONTIAC G6. IT HAS LESS THAN 11,000 MILES ON IT. IT IS USED LESS THAN 50 TIMES A YEAR. I HAVE NOT HAD AN ACCIDENT IN ABOUT 18 YEARS. YOU CHARGE ME OVER $1,400 A YEAR. I SHOULD NOT BE PAYING FOR OTHERS ACCIDENTS.
INSURANCE SHOULD GO DOWN EVERY YEAR YOU DO NOT HAVE AN ACCIDENT AND AS YOU CAR GETS OLDER. NOT BECAUSE YOU REDUCE YOUR COVERAGE.
I have been one of your so-called “loyal” customers for many years with no accidents or tickets. My current vehicle was purchased in 2007 & has approximately 52,000 miles. I recently moved 25 miles to a new residence in another county. I still live in the same state so why was my auto insurance “adjusted” to a higher rate? Unless I am reimbursed for this arbitrary increase I will strongly consider another insurance company in the future. CN
Charles – Thank you for being a customer. If you have questions about your policy, please contact our customer service center at 800.423.0567.
Question I have is I have 2 older cars that don’t fit into classic cars but old enough and special enough that I feel full coverage is necessary. One is a 04 Corvette and the other is a 04 Thunderbird. Both have less than 30 K on them. Value would be more to replace with similar than actual BB value. Thoughts or suggestions on insuring these vehicles.
I have dropped comprehensive and collision coverage on my 2005 Honda Pilot. When traveling with friends we like to share the driving.
Is there a problem with me doing part of the driving of a friend’s vehicle when I do not have the coverage on my own vehicle?
My insurance is with The Hartford
Hi Gail, please call our Customer Service Department at 877-896-9320 and one of our representatives can gladly look into this for you. Thank you!
I am excited to read the post and happy that you have stated genuinely good information in this blog. Hope more good things will come in future as well. Information stated in points is particularly easy to understand and it seems that it comes from valid sources. Thanks for this blog and looking forward to similar posts in the future.
Thanks for your feedback, Giselle! We hope to hear from you again soon.
Do Car Insurance Check Credit?
Hi Jeffrey, great question! Insurance companies check your credit score when you’re getting a quote to calculate your insurance risk. If you are shopping for auto insurance, the insurance agent can provide you with more detail on how this process works and it is required.
I would like to discuss reviewing our car coverage.
Hi Pamela, if you call our Customer Service Center at 1-800-423-6789, one of our representatives will be happy to review your auto coverage with you. Thank you!