Smart Insurance Strategies for Your Older Vehicle

Classic Car Insurance: What You Need to Know

Classic or antique car insurance is different from regular car insurance. These types of car insurance policies provide agreed-value or stated-value coverage on antique and classic cars. In contrast, regular car insurance policies typically only provide actual cash-value coverage on your vehicle. The agreed value of your car is a coverage amount for your vehicle agreed upon between you and your auto insurance carrier when you purchase the policy. With an agreed-value insurance policy, the car's value remains the same on the policy as long as you keep it insured with the same auto insurance company. Your insurance agent or company can help determine the value of your vehicle and see if it qualifies for a classic or antique car insurance policy.

When you purchase antique or classic car insurance, your policy may have mileage restrictions and require proof that your vehicle is garaged in a secure location. In addition, most insurance companies that provide antique and classic car insurance require that you have at least one regular-use vehicle per driver in the household. This means that your antique or classic car cannot be the only car in your household. When shopping around for antique or classic car insurance, ask your insurance agent or insurance company about any restrictions or limitations the auto insurance policy may have.

When to Drop Full Coverage Insurance on Your Older Car

A car insurance policy that provides liability coverage only is always going to cost less than a full coverage policy. Still, this type of policy only covers the injuries and damages you cause to other people and their property in an accident that is your fault. A full coverage policy includes physical damage coverages called comprehensive and collision, which respond to fix or replace your vehicle if it is damaged. Before you decide to drop the full coverage on your older car, you should determine the vehicle's value. You can do this on a website such as Kelley Blue Book. A vehicle value estimator like Kelley Blue Book will factor in the car's mileage, condition, location, and any special features your vehicle may have and will give you a range of what your vehicle may be worth. Once you have determined the value of your vehicle, you can weigh whether or not the cost of the comprehensive and collision coverage on the car is worth keeping. The value of a vehicle depreciates rapidly, so keeping track of that value is important as your car ages. For example, if your car is worth $3,000 and you carry a $1,000 collision deductible on the car, you would only get $2,000 from your insurance company if the car was damaged or totaled in an accident. If you pay $300 per year for the collision coverage, you have only gained $1,700 to put toward a new car, and you would carry the accident on your driving record for up to five years if you were at fault in the accident. The increased cost of your insurance over five years may surpass the amount you received from your insurance company to fix your car after the accident.

Remember that if you still have a loan on your older vehicle, your lender will require that you maintain comprehensive collision coverage on the car until you have paid it off.

Tips for Maintaining Your Older Car’s Value

You can help to maintain the value of your older car by performing regular maintenance and repairs on the vehicle. Keep all of the receipts for the work that you have done on your car, including regular service, replacement of equipment, and anything that you may do to the car to increase its value, such as a new paint job or re-upholstering of the interior. This is especially important when you are looking to purchase antique or classic car insurance, as insurance companies that provide this type of coverage will take all of the work you have done on your vehicle into consideration when determining the agreed value of your car. Even on a standard auto insurance policy, you must relay any modifications or repairs you have done on the car to your claims adjuster after an accident. The adjuster may be able to factor in the cost of some of the repairs and modifications when determining how much your insurance company will pay you to repair or replace your vehicle.

Insuring Your Older Car on a Budget

Like any car insurance policy, the cost of insuring your older vehicle is determined using many factors, including your address, age, credit score, the type of vehicle you drive, and the coverages you select when purchasing your policy, among other things. When shopping around for car insurance for your older vehicle, always ask about any discounts you may qualify for that may reduce the cost of your insurance premium. Available discounts may include:

• Billing discounts for paying your premium in full or using an automatic payment plan option for your monthly payments

• Bundling discounts if you purchase your car and homeowner's or renter's insurance through the same insurance company

• A defensive driving discount if you complete a defensive driving course approved by your insurance company

• Low mileage discounts

These are just a few of the standard discounts most insurance providers offer. Each auto insurance company has available discounts and credits that you may qualify for. Your independent insurance agent or insurance company can help you determine which discounts apply to you to help minimize the cost of your car insurance premium. You can also use an online rating tool such as A-MAX Insurance to get quotes from multiple insurance companies to find the best coverage for your car at a price you can afford.

Car Insurance for Older Vehicles FAQs

Q: Are older vehicles less expensive to insure than newer ones?

A: Car insurance rates for older cars depend on the car’s value, the cost of the parts to repair it, and its safety features. Older cars may not have the most current safety features, and the cost of hard-to-find parts for older vehicles can increase the cost of repairs, sometimes making older cars more expensive to insure than newer ones.

Q: Should I drop the comprehensive and collision coverage on my older car?

A: Before removing these valuable coverages from your car's insurance policy, determine your vehicle's value by using a website such as Kelley Blue Book. This will help you weigh the cost of these coverages against what your insurance company would pay you to repair or replace your car after an accident.

Q: Should I buy antique or classic car insurance for my older vehicle?

A: Insurance for antique or classic cars can be a great option if your older car is in good condition, used infrequently, and you want to protect its value by having agreed value or stated value insurance coverage. Antique and classic car insurance policies have a lot of limitations so you will need to speak with your insurance agent or an insurance company specializing in this type of auto insurance to see if your car qualifies.