5 car insurance tips for clunker coverage
Collision covers you for loss or damage in any accident, whether it involves another car or stationary objects, such as fire hydrants or utility poles. As your car's value declines, you may end up paying more in premiums than the car is worth.
Nationwide, premiums for collision coverage averaged $301 on a $795 policy, based on the latest Insurance Information Institute figures.
"When the coverage costs one-tenth of the car's value -- say, if collision insurance is $200 per year and your car is worth $2,000, you probably should consider dropping it," says J. Robert Hunter, director of insurance for the Consumer Federation of America. "As a rule of thumb, you can probably stop insuring cars for collision when they get (to be) seven or eight years old."