You may think it’s cheaper to buy car insurance for an older car, but that’s not always the case: There are no discounts just for driving an older vehicle. Or you may suspect it could cost more because a classic car has so much value. Wrong again.
When you’re looking for the best way to insure an older car, you should think about it the same way as when you choose a standard insurance policy, in regards to both your own needs and your state's laws. Here we cover the many factors at play, and why the age of your car is not a major one.
- While older cars may need niche insurance, it doesn't always cost more than it would to insure a standard car, and in many cases, it may be cheaper.
- There are specific features that dictate whether a car is "classic," so don't assume your car needs classic car insurance just because it's old.
- Parts and repairs for classic cars can be quite costly, but the costs may not align with the price you pay for premiums.
- Extra coverages might be worth the higher monthly price, but with a classic car, you should assess the full scope of risks before you enroll.
Is Your Car a "Classic"?
The insurance industry’s bar for what counts as a classic car is pretty high, and the beloved 1980s hot rod that you’ve driven into the ground might not meet the mark.
When one thinks of a "classic" car, what comes to mind is a car that gets lots of looks (maybe the envy of collectors), stored in a garage (or another safe manner), driven rarely (even then only by very safe drivers), and is not used as your main way to get from here to there. In other words, it's a car you own more for show than for any useful purpose.
The Risks of Owning a Classic Car
Now let's think like an insurer. Your classic car may hold a lot of value, and it may be costly to replace, but is it risky? In other words, how does it compare to other cars on the road in terms of risk? Since it's not driven too often and kept locked up most of the time, the sheer amount of time it is on the road is pretty small. This works in your favor. What about theft? There's a chance, but it's a pretty small chance if your car is kept in a garage at home and parked in the public eye while out. Now you start to see why the age and value of your car are only a piece of the puzzle. The risk to insure the value behind a classic car is balanced these other factors that limit exposure to risk of damage.
How Much Does It Cost to Insure an Older Car?
The first thing most people think about when gauging the cost to insure an older car is the actual amount they pay an insurance company each month. While this is far from the only factor at hand, it is at the top of most people’s minds, and worth looking into.
The simple answer is that car insurance premiums do not go down or up just because a car is older. In fact, there is very little cause or effect between the age of the car and the cost to insure it on a monthly basis. Of course, you can always adjust your coverage levels if you would like to lower your monthly payment.
Simply put, premiums tend to be higher when your car presents a greater risk of damage. This might be if, for instance, you have a car that is beloved by thieves, if you’re an unsafe driver, or if you don’t have the best safety and anti-theft features. Older cars do tend to fall into some of these categories, such as lacking modern features, and so your premiums may be higher for any of these reasons, but not because your car is old.
The rest of the factors that go into the price of your premium, such as your age, location, and driving history, will have an impact on rates for old and new cars alike.
If you're willing to put in the extra effort, there may be hidden ways to lower your auto insurance premium that may not always be stated in plain terms or out in the open, such as paying in bulk, or good driver discounts.
The Cost of Repairs and Sourcing Parts
If you own a car for long enough, the chances that you’ll have to repair it at some point are pretty high. If you have an older car, the chances are even higher.
If you need to make a repair and your car is an older model, it will most often be harder to find the proper parts than it would be for a newer model. They may no longer be made in any routine fashion. When you do find true parts, they may need to be special ordered, shipped from some distant retail store (or private owner), or found in a salvage scrap yard. For all of these reasons, older parts that you do find can be quite costly.
The cost of repairs is an important piece of any prudent car budget, and this is even more true for an older car.
Comprehensive and Collision Coverages
In many cases, and for most drivers, springing for comprehensive and collision coverages is a smart idea. Whether or not they suit your older car's needs is up for debate. First, it's important to know how they differ and what each one covers. Comprehensive insurance pays for repair to your car from damage due to a number of events that are out of your control, but not for crashes. Think theft, bad weather, cracked windshield, or a deer running out onto the road. Collision insurance covers the costs of any damage done to your car as a result of a crash. There are many nuances to each, but this is the rough breakdown.
Do You Really Need the Extra Coverage?
Dropping either or both of these coverages from your policy is a quick way to save on the cost of premium costs, so you may be thinking: Why not?
For some, it’s a smart idea: Collision only kicks in to cover your car if you cause a crash, be it with a car, pole, tree, or railing. The older your car is, the less money you are likely to get back should you crash and damage it. If you are a safe driver and can set aside the cost to replace (not repair) your car in savings, then dropping this coverage is almost always a good idea. But if you’re prone to accidents or strapped for cash, it may be better not to. And of course, if you’re still paying off your car loan, dropping this coverage is not an option.
Comprehensive coverage is more of a bonus, but the only drawback of skipping it is that you won't be able to protect against a wide range of types of damage that come with a wide range of costs.
Some states require drivers to have both comprehensive and collision coverage (or one or the other) by law, so make sure you check the laws in your own state before making any drastic moves.
How to Choose a Policy
If your car is a legit antique, you may be bracing yourself to pay a lot. But that’s not always how antique auto insurance works. Data provided by Progressive found that classic cars cost about 36% less to insure than a standard modern car because policies must be tailored to your car's specific needs by default.
Don't Pay More Than You Need To
That said, put in the groundwork to make sure you have coverage that fits your car's needs, without much extra. Get the best coverage you can afford and speak to a trusted professional: When you’re dealing with a classic car, you’re not talking about something that you can easily (and cheaply) replace, so finding the best policy is critical.
There are many insurance providers for classic cars, such as Grundy Worldwide, Hagerty Insurance Agency, and Heacock Classic, just to name a few. You can also find classic car insurance through traditional providers (or through their partners) like Hartford, Farmers, Allstate, and Geico.