Insurance for older cars

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Are you looking for insurance for older cars? With chip shortages creating new car shortages nationwide, many are holding onto older cars or purchasing them instead of newer vehicles. But are older cars cheaper to insure? Depending on the make and model of the older car, you may find that older cars are cheaper to insure than some newer cars. There are also several ways to make coverage adjustments to get cheaper insurance pricing for older cars.

Is it more expensive to insure an older car?

Whether it is more expensive to insure an older car versus a newer car comes down to several factors. Besides personal criteria like driving record, claims history, age and location, the make and model of your car as well as the type of coverage you need factors into the cost of car insurance for older cars.

Premiums for each make and model differ between insurance companies because each uses its own rating structure. A vehicle’s repair price, anti-theft and safety features are considerations used to determine the price of auto insurance for each make and model. Older cars may not have as many safety features as newer cars, which may reduce available discounts and increase the cost of auto insurance. The older a car gets, the harder it may be to source parts for repair, which can also drive up the cost of car insurance on older cars.

What kind of insurance do I need for an older car?

If you have an older car, you may be wondering, “Do I need collision insurance on an old car?” or even “Do I need comprehensive insurance on an older car?” Neither option is an individual insurance policy and choosing whether to purchase collision or comprehensive coverage is optional. However, the decision may be dependent on other factors. With a loan on your old car, the lender may require you to carry these coverages to satisfy the terms of your loan or lease agreement. If you own an older car, you have more options to consider when choosing auto insurance coverage.

Comprehensive and collision coverage are optional physical damage coverages that can repair or replace your older car if it is damaged by a covered claim. If you can afford to fix or replace your older car without insurance, you may not need these coverages. However, if you cannot afford it, then you might consider keeping these coverages to protect your finances. A general rule of thumb used by insurance professionals in deciding on whether to maintain physical damage coverage is the 10% rule. In this case, when the coverage costs over 10% of the car’s replacement value, it may not be worth keeping the coverage.

No matter how old your car is, you are required to carry state minimum liability limits or prove financial responsibility to register it and legally drive on roads. Each state has its own requirements, which must be met and maintained for as long as the car is registered and tagged. If you can afford more than the state minimum liability insurance, it can provide greater financial protection and is recommended by most insurance experts.

State minimum insurance

State minimum insurance is the least amount of liability coverage you must have to register and drive your car. Some states also require personal injury protection (PIP) or medical payments and uninsured motorist coverage. To determine the minimum amount of coverage required in your state, you could visit the National Association of Insurance Commissioners (NAIC) website, click on your state and then click “visit website” on the right side to go to your state’s insurance website.

An example of state minimum insurance limits for Alabama requirements:

  • $25,000 for bodily injury per person
  • $50,000 for bodily injury per accident
  • $25,000 for property damage per accident

These limits are the most the insurance company will pay if you cause an accident with injuries or property damage to others. In some states, you could be sued for anything over the limits, making it important to consider purchasing as much coverage as you can afford.

Classic cars vs. older cars

While a classic car is an older car, there are key differences between the types of coverage offered for each type. Auto insurance for older cars that are not considered classic can generally be part of a standard auto insurance policy. However, a classic car may be insured under a specialty insurance product, offering unique coverages not found on the average policy.

A classic car is usually 20 years or older and has collectible value that typically exceeds its original sale price. Even with added features not offered in standard auto insurance, classic car insurance is usually cheaper. Some insurance companies only offer coverage as a specialty auto insurance policy, while others offer it in addition to standard insurance coverage.

Insuring a classic car

When insuring a classic car, you should consider the optional coverages available, like restoration and spare parts coverage. If you take the car to shows, there may also be additional protection for trip interruption and other expenses that may arise.

Some insurance companies allow you to choose between agreed value and stated value. Agreed value is one that both you and the insurance company agree on, and if the car is damaged or totaled, you may receive the cost to repair or the agreed value, whichever is less. Stated value allows you to choose the amount of coverage, which could be less than what the car is worth, but may limit how much you receive if the car is damaged.

Frequently asked questions

Is it better to have collision or comprehensive?

Collision and comprehensive are both physical damage coverages for your older car. If you do not have a loan or lease contract, you can choose both, just one or neither. Collision provides coverage if another car or object damages your car. Comprehensive covers other physical damage occurrences, like vandalism, theft, broken glass and hitting an animal.

Is it worth having comprehensive insurance on an old car?

Only you and your lender can determine if it is worth having comprehensive insurance on an old car. Keep in mind that if your insurance company totals your car in a covered accident, the most you will likely receive is the book value minus your deductible and any existing damage. Consider reviewing the book value and the cost of comprehensive insurance on an older car to decide what is the best choice.

Is comprehensive car insurance the same as full coverage?

Full coverage is a catch-all phrase that includes physical damage coverage for your older car like comprehensive and collision insurance. It may also include optional coverages like roadside assistance, rental car reimbursement and gap insurance. Each insurance company offers its own line of coverages, so consider the available options to determine which ones are best for your older car insurance needs.

Written by
Mandy Sleight
Insurance Contributor
Mandy Sleight has been a licensed insurance agent since 2005. She has three years of experience writing for insurance websites such as Bankrate.com, MoneyGeek and The Simple Dollar. Mandy writes about auto, homeowners, renters, life insurance, disability and supplemental insurance products.
Edited by
Insurance Editor