Is It Worth Having Collision Coverage On an Old Car?

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Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on November 6, 2024

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated November 6, 2024

Visit author page

4 minute read

Article Contents

If you have an older car that you don’t drive around much, you might wonder whether collision coverage is still necessary. After all, if your car is constantly parked in a garage or storage, what is there to protect it from? 

Get all the answers you need regarding whether to stop or continue collision coverage in this comprehensive guide.

Collision Coverage for Older Cars At a Glance

  • While collision coverage for older cars isn’t necessary, it can still provide financial protection and peace of mind if you occasionally drive the vehicle. 
  • If you decide to stop collision coverage, you can consider alternatives like comprehensive coverage, liability-only coverage, classic car insurance, or self-insurance.
  • When deciding to stop collision coverage for your older car, it may help to get your car valued at a dealership.

Do You Need Collision Coverage on an Older Car?

Whether you need collision coverage on an older car depends on how much peace of mind you want and how valuable your vehicle is. You can make an informed decision about collision coverage for your older vehicle by considering these factors:

Your car’s value:

Consider whether your car costs more or less than the average price of collision coverage (typically between $500 and $5,000, but this range depends on your location and driving history). As a rule of thumb, it may not be worth getting collision coverage for a car worth less than $2,000.

Your finances:

Collision coverage may not be necessary if you have the funds to shoulder repairs out-of-pocket.

Your driving habits:

If you have a bad driving history or are a new driver, getting collision coverage can provide a financial cushion in case of an accident.

State laws:

Some states may require collision coverage on specific vehicles or if you loan/lease your car.

Collision Coverage for Older Cars_Key Factors to Consider

When to Stop Collision Coverage

While collision coverage can give you peace of mind, especially if you live in an accident-prone area, dropping it sometimes makes more sense than maintaining it. Besides your vehicle being low-value, other instances in which you might consider dropping collision coverage include the following:

Your vehicle is hardly being used:

If you keep your car in a garage or storage, there’s no point keeping your collision coverage. However, comprehensive coverage can provide a financial fallback in case of theft or vandalism.

Your vehicle is insured on another policy:

If your vehicle is insured on another family member’s policy, you won’t need collision coverage. However, note that collision coverage will only apply to your vehicle if you keep it at your family member’s address.

Computing Your Vehicle’s Value

So, you’re torn between keeping your collision coverage and dropping it, which involves calculating your vehicle’s value. Where do you start? 

You can use an online valuation tool to get an estimate on older or certified pre-owned vehicles. These resources allow you to find your vehicle’s make and model and get a quote, but they may not be the most accurate way to value your car. 

Another option is consulting your local dealership. If you’re still in touch with the dealership that sold you the car, you can ask them to value your vehicle based on a physical inspection and against current market conditions. It’s best to provide as much information about your car, such as its repair history and maintenance reports.

Helpful information to have on hand when you get your vehicle valued includes the following:

  • The car’s make and model
  • The car’s mileage
  • The overall condition of the car, including its exterior, interior, and mechanical components
  • Additional features like leather seats, a sunroof, a navigation system, or a sound system

Alternatives to Collision Coverage

Consider these alternatives if you’re dropping collision coverage on your old car.

Liability-only insurance or third-party liability is the minimum coverage required by most states in Canada. It’s an affordable option for older cars and covers bodily injury and property damage caused by an accident. While it’s a convenient policy, it won’t cover direct damage to your vehicle, and you’ll have to pay for repairs out-of-pocket.

Comprehensive coverage protects you against theft, vandalism, natural disasters, and other accidents not caused by a collision. It can provide ample protection against unexpected losses, but it may not be necessary if you have a low-value car.

If your older vehicle doesn’t require too much maintenance and still functions well, you can opt to set aside funds to cover potential repairs or replacements instead. You have complete control over insurance costs through self-insurance, but it will require careful financial planning.

Most drivers keep collision coverage on old or non-functional cars because they’re vintage or classic. In this case, you can opt for classic car insurance instead. 

Classic car insurance protects antique or classic cars against collisions, property damage, and bodily injury. It can also finance specialized repairs and restoration requiring hard-to-find parts. 

However, what defines a “classic” car may depend. Most classic car insurance policies apply to cars older than 25 or 30 years. The vehicle’s value and rarity may also contribute to its status. Depending on the insurance company, you may need a clean driving record to qualify for classic car insurance.

You can adjust your policy instead if you’re on the fence about pulling the plug on your collision insurance because you’ve already paid premiums. For example, you can negotiate lowering your deductible but may pay more in premiums. 

Still, you may save money if you choose a deductible of under $200 or even $0. But remember that if you make a claim, your premiums will likely increase in the coming years.

Key Advice From MyChoice

  • Keep as many documents and as much information on your older car as possible, especially if you plan to stop collision coverage. Tracking the car’s history and condition can tell you whether keeping the policy is worth it.
  • Evaluate your financial situation and determine whether paying for peace of mind is worth it. Consider financial obligations like debt and other home-related expenses.
  • Review your insurance policies regularly and keep insurance records. You might find better options for an older vehicle.

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