No Comprehensive and / or Collision Coverage on Older Vehicles

Posted in

March 2nd, 2009

If you own an older car, or one that is in poor condition, you may not want to purchase comprehensive and collision coverage for your car. There are several good reasons for this.

When No Comprehensive/Collision Makes Sense

Sometimes we find ourselves driving an older vehicle that has little actual market value. It can be a great truck with 150,000 miles on it, and you have absolutely no plans to get a new one because it’s running so well, and you’re pretty certain it’s going to last a lot longer. A car like this is an old friend, but it’s not worth a lot in terms of market value. Given that, it may not make financial sense to get comprehensive and or collision auto insurance coverage for your old truck, because the amount you pay every month in terms of your premium will be more – sometimes significantly more – than what you would get in terms of a dollar amount from your auto insurance company for your totaled or damaged car.

When to Save on Auto Insurance Rates

If, for example, your old truck is worth only $1,000 in terms of market value, and you’re paying $50 a month in comprehensive coverage, and then the truck gets stolen, you’ll only get $1,000 from your auto insurance provider. If you’ve been paying $50 a month for comprehensive and or collision coverage for the last two years you will be paying more for the coverage than the auto insurance would pay you for your car.

It’s important to have comprehensive auto insurance, and collision auto insurance too. However, if your car is really on its last legs, you may not need to get these two forms of auto insurance coverage. Save on your auto insurance rates and drop coverage on your older cars.

To explore this question in further detail, be sure to go over it with your auto insurance representative. You should also determine the market value of your vehicle before committing to comprehensive and or collision auto insurance.