Auto Insurance for Older Cars
Owning an older car can be a benefit when it comes to finding cheap car insurance. Many companies will charge less for auto insurance prices if your vehicle is older especially if you are carrying full coverage on it. Older cars cost less money for the auto insurance carriers to repair damages in the event of a covered accident. As far as on the liability side it's not as much of a discount because old cars can do as much damage as new cars in the event of an accident.
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Drivers in most states are required to carry state minimum liability coverage no matter how old your vehicle is. Each state will set a minimum bodily injury and property damage limit of coverage that they require you to carry before you are legal to driver. Many insurance agents will recommend carrying higher limits of liability than the state requires so that you are protected in case you have an accident where you inflict serious damage to a 3rd party. Carrying the higher limits will help protect you from lawsuit if the damage goes above your covered limits on your policy.
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Bodily injury limits of liability- This is the coverage on your personal auto insurance policy that pays for the damage you do in the event of a covered accident that covers 3rd party medical bills.
Property damage limits of liability- This is a coverage on your personal auto insurance policy that pays for damages you do in the event of a covered accident that pays for property that you damage, that goes to the party you hit.
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We recommend checking with you state insurance department to determine what your state requires as far as mandatory insurance coverages.
Other Coverages to consider to add to your policy on older cars:
Uninsured motorist coverage- This coverage covers your medical bills and vehicle in the event a driver who does not have insurance hits your car and they are at fault. No matter how old your car is this could be an important coverage to have especially if you do not have health insurance or live in a big city. Large cities are where most uninsured motorist claims happen. It is important to note that not all states off protection for your vehicle to be covered with uninsured motorist coverage. Oklahoma is an example of a state that uninsured motorist coverage only covers your medical bills not the damage to your vehicle. Whereas Texas covers both.
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Medical Payments- This is a coverage that covers your medical bills in the event of an accident whether you are at fault or not. No matter how old your car is this can be an important coverage especially if you do not have health insurance or have a high deductible.
One thing to remember that if your vehicle is being financed that the lienholder will require you to carry full coverage no matter how old your vehicle is. If your car is not financed then the coverage is obviously optional.
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Comprehensive and Collision Insurance- This is also known as full coverage insurance. Many people do not carry this coverage on older vehicles unless the car is financed. These coverages help pay when your car is damaged in the event of a covered claim. Comprehensive coverage kicks in for everything but collision basically. Whereas Collision coverage covers damages to your car when you collide with another car or other type of property.
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If you do choose full coverage insurance for your older car you will be given the choice of deductible to choose from. Here are the different deductible options for your older car:
We recommend if your car is older to choose a lower deductible, just because the value of your older car will be less so you would want the least amount of money out of your pocket as possible. This will increase your monthly premium but not by much since your car is older.
Click here to read more about different deductible options for full coverage insurance on older cars
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Differences between insurance for an older car and classic car insurance
There are several differences between older car insurance and a true classic car insurance policy. There are few insurance companies that offer classic car insurance and the company that sits at the top of the list is Hagerty. Hagerty has been the dominant player in this segment for many years. These policies are also known as antique auto policies. It is important to remember that antique auto policies are meant more for old cars that are mainly just taken to shows.
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If you are purchasing auto insurance on a normal auto insurance policy the damage to the vehicle is paid on an actual cash value basis. So, if you have a 1965 Ford Mustang that you have restored and you put $25,000 of your own money into it and it is totaled on a normal car insurance policy you will not get paid anywhere near what you have invested in it. This would be a situation where purchasing antique auto insurance would be very necessary.
These classic car insurance policies usually offered comprehensive and collision coverage on an “agreed value” basis. The agreed value is usually based on the vehicle’s condition, any parts that are special ordered, and any improvements and cost to repair the car. So basically, what we are saying is the coverage is not based on the vehicle’s age and mileage.
Some older cars can cost more to repair if the parts to repair them are aftermarket parts which can be difficult to find and more expensive some times.
Do older cars cost more to insure?
The rates for older cars on a full coverage policy are much cheaper to insure. Just because the cost auto insurance carriers have to pay to repair an older car is much less, so that savings is passed on to you. In most cars older cars are worth much less than newer cars.
Also, another way you can save money on your car insurance policy for an older vehicle is dropping comprehensive and collision coverage. This is also known as full coverage and the most expensive kind of insurance. Removing this coverage would put you back to having liability auto insurance which is the cheapest option but it also puts you at the most risk in case you are involved in an accident because your policy will not pay for any damages to you or your car if you are involved in an accident.
Even if you drop comprehensive and collision coverage, you will have to pay for other coverages on your old car such as bodily injury and property damage liability coverage which is required by state law.
The exact premium would depend on many different factors, here are some of the major factors auto insurance companies use to price the insurance for your older car:
- Age of drivers
- Zip code where car is kept
- Coverage levels
- Driving record
- Credit score
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These are just a few of the factors that auto insurance carriers use to set their rates for old cars. We have found that each insurance company has their stronger focus on certain rating factors. Some care more about credit and others care just about driving record, so you will see a vast difference in price with each company you contact for a quote.
Many new cars may have discounts for newer safety features that older cars may not have, like OnStar for instance you probably won't find on a 1990-year vehicle. So, this would be one example of some perks that new cars have as far as discounts are concerned.
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How to find cheap insurance for my older car?
Finding cheap insurance for your old car is basically the same as finding cheap insurance for anything else. Except if you are needing Antique Auto Insurance, then we recommend Hagerty Insurance Company as your best option for any kind of classic car insurance. They offer better coverage on comp and collision than most anybody else will.
But if you are just looking for the cheapest policy for your older car then we have some tips for you. Overall, we found Progressive has the best rates for older cars. But Progressive does use credit as a rating factor so that needs to be considered. The second-best insurance company for older cars was Save Money Car Insurance. They do not run credit and give discounted prices for older cars.
Here are a few tips you can use to find cheap insurance for your older car:
- Set your policy up on auto pay
- Sign up for paperless billing
- Pay your policy in full for six months
- Keep continuous insurance for at least 6 months.
- Improve your credit score
You definitely have a better chance of finding cheap insurance for older cars compared to newer ones. These tips above will definitely help you do that but the two most important things are to shop around as much as possible and keep a good driving record. If you do these two things you will be on your way to saving money on your insurance policy.
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Should I carry full coverage insurance on my older car?
This can be a loaded question and really is situational. First off if your older car is financed then yes you should and usually are required to carry full coverage insurance. If your car is paid off then this is an optional coverage. So, a good rule of thumb is if your older car is worth less than ten times the annual premium you would pay for comp and collision coverage combined. If this is your situation then it may not be cost effective to carry full coverage insurance. If you do decide to drop full coverage insurance then its important to note that you will be become responsible for any damage done to your vehicle. We suggest you discussing this situation with an insurance professional who is familiar with your situation before you make this decision.
Comprehensive and Collision coverage is not required in any state like Liability coverage is. The value of your vehicle is one of the best ways to determine if you need full coverage or not. The one good thing about removing comprehensive and collision coverage is your monthly premium will lower.
We do recommend taking out roadside assistance coverage on your older car. Older cars tend to break down more and this coverage can really help if you are ever stranded on side of road. This is usually a very cheap extra coverage to add on to your policy. It normally does not come automatically on your auto insurance policy so you must request it but it usually only adds about $8 more monthly to your premium which isn't too bad.
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FAQ’s for older car insurance:
What kind of insurance do I need for my older car?
You are legally required to carry the state minimum liability limits for the state you reside in just like you would for any type of vehicle. If you are financing your older car then you will be required to carry full coverage by your lienholder not by state law though.
Are older cars cheaper to insure?
For full coverage in most cases yes, they are cheaper but not as much for liability only coverage. The reason why full coverage is cheaper is because it costs the insurance companies less money to repair older cars.
Should I carry full coverage insurance on an older car?
If your car is financed then yes you should, if it is not financed then you need to determine the value of your vehicle and compare it to the cost it will incur to carry full coverage insurance. Its best to discuss your situation with an insurance professional before making any decisions.