Auto Insurance for Used Cars
Getting car insurance for your used car is very important. All states require you to have at least state minimum auto insurance before you can get your used car on the road. You do not have to purchase actual coverage until after you purchase the vehicle, but it is wise to call around and get insurance quotes before you purchase the used car to make sure you can afford it. Each auto insurance company has specific rates for each situation. So, one company could give you one rate and you call another and get a totally different price.
Just because you are buying a used car does not guarantee that you will pay less for insurance than you would for a new car, especially for liability only coverage. Liability rates are basically the same no matter what vehicle unless it’s a bigger vehicle like a truck or van that can do more damage to other cars.
For additional resources on liability car insurance for used cars see below:
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But as far as full coverage insurance on used cars is concerned it is cheaper for used cars compared to new cars in most cases. It really depends on what model year the vehicle is and value of the car to determine the price. Even some used cars can be very expensive to insure for full coverage, like a 2018 Cadillac Escalade, just because it is used it is still going to be very expensive to insure because of the high value of it. The more expensive a vehicle costs the more the insurance company will charge for the auto insurance price.
Here are a few auto insurance companies we found that offer affordable rates for full coverage insurance on your used car:
- Save Money Car Insurance
- Safe Auto
Click here to get a cheap full coverage insurance quote on your used car
Additional resources for full coverage insurance on used cars:
How much does used car insurance cost?
Used car insurance all depends on what kind of used car it is and what coverage you are looking at for starters. There are so many factors that go into how auto insurance companies set their rates for used cars. Here are some of the other core factors that go into auto insurance prices for used cars:
- Zip Code
- Credit Score
- Driving Record
- Insurance History
Additional resources to learn how auto insurance companies set their rates:
Generally, though people with older cars pay less for insurance and the main reason is not related to coverage levels pursier but more related to cost of repairs related to that actual cash value of the vehicle. The actual cash value of a 1998 ford mustang is much less than a 2021 ford mustang, so basically if you total a 98 mustang the auto insurance carrier will pay out much less than if you totaled a 2021 mustang. Hence the main reason why in most cases used cars are cheaper to insure. Older vehicles lose their value over time and people usually decrease levels of insurance the longer they keep the car.
Drivers with older cars generally remove comprehensive and collision coverage first form their policies. This is normally the first coverage to remove because it many cases it can be a waste of money carrying full coverage on older cars because if they are totaled you will not get paid very much money from the insurance company when you compare it to the premiums you have been paying.
People who buy a newer car and finance or lease it are more likely to carry full coverage insurance but once the car is paid off many people will drop the comprehensive and collision coverage to save money on their monthly premiums. It is important to remember once you remove these coverages you will become responsible for any damage that is done to the car. So, you will save money monthly on premiums but will gain risk of financial loss if your car is damaged.
Why older cars are not always cheaper to insure
While in most cases it is usually cheaper insure a used car that is not the case every time especially when it comes to liability only. We have not found a consistent relationship between age of car and cheaper insurance for liability only coverage. Auto insurance companies feel a 1990 Dodge Ram can do the same amount of damage to a 3rd party as a brand-new dodge truck can. Because liability only covers the damage your vehicle does to a 3rd party the age of the vehicle doesn’t matter as much as the size of the vehicle does.
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What are the best insurance companies for used cars?
Above we mentioned the best insurance companies for full coverage on used cars and it seems to be similar ones for overall best prices for used cars whether it be liability or full coverage except for a few. Here are the best overall companies for used car insurance:
- State Farm
- Fred Loya
We suggest getting as many quotes as possible for your used car so you can find the best company possible for your coverage needs. Every company has a niche so just because you call one of the companies, we mentioned for a quote on your used car does not mean they will be the cheapest for every situation.
Additional resources for finding the best auto insurance companies for used cars:
How to get insurance for your used car
If you have a current auto insurance policy and are buying a used car in most cases it is best to add it to your current policy. If you do not have active insurance and are buying a used car we recommend calling around and getting as many quotes as you can, this is one of the best ways to insure you will get the best price. When getting insurance quotes for a used car it is actually the same process as you would do for any type of car. You are able to get a quote online or visit a local insurance agency.
Additional resources for getting online quotes for used cars
You do not have to purchase insurance on your used car until you actually acquire it. In fact, we recommend waiting until you have possession just in case the deal was to fall through. Just because if you have to cancel it because the deal busts some insurance companies will not give you much of a refund. It is wise though to be getting lots of quotes before purchase so you can be ready and prepared financially in case you do purchase the used car. Since car insurance is one of the biggest expenses of owning a car, it is so important to do your due diligence on the best used car insurance companies before purchase.
Once you purchase your used car you will get the title transferred into your name and then start the process of getting it tagged in your name. You can do this at a local tag office. Most every state will require you to do this.
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What insurance coverages do I need for my used car?
Every situation is different so what coverage may be good for one person may not be good for another. But all used cars on the road will require the state minimum liability limits to be legal to drive them. In addition to this if your car is financed or leased then your finance company will require you to carry comprehensive and collision coverage which is also known as full coverage insurance. Most lienholders require a minimum of a $500 deductible to protect their interest in case your car is totaled.
Beyond these two required coverages it really depends on your situation. Most all insurance agents will tell you the more coverage you have the better and that can be true if money is not a problem for you. But if money is tight, you may not need all the coverages you have on your policy. The one coverage that we always recommend for our customers with used cars is roadside assistance. This is a coverage the will protect you when on the side of the road broken down and it is cheap in most cases. We found most auto insurance companies only charge about $8 monthly for this coverage. We recommend discussing coverages on your used car with an insurance professional before making any decisions.
Additional resources for auto insurance coverage options for your used car