Understanding automotive insurance can sometimes feel overwhelming. With so many different companies, policies, and types of coverage, it can be tough to know where to start. While brand-new vehicles sometimes include some sort of coverage with their purchase, what about older vehicles? The original insurance coverage may be unnecessary, and their original warranties have probably expired — so what do older cars require?
Assuming some form of car insurance is required in your state as it is here in Illinois, you may wish to further cover your used vehicle beyond the minimum requirements, even if it’s a decade old. Here, we’ll not only provide an overview of the basics of car insurance, but we’ll also investigate why and how you may want to insure an older vehicle, its potential costs, and even the types of cars that are the cheapest to insure. Read on to find out more about insuring older cars and whether you should consider it for yourself.
The Basics of Auto Insurance: Minimum Liability Policies and State Law
Auto insurance is financial protection that covers you, your vehicle, or someone else’s property in case of a car accident or another unexpected or unplanned event. While insurance coverage plans can vary widely, the most basic insurance is referred to as liability insurance, which covers damage or injury to other vehicles or drivers up to a certain amount. Almost every state requires some form of auto insurance.
Here in Illinois, the required minimum insurance coverage is $25,000 for the injury or death of one person, $50,000 for the injury or death of more than one person, and $20,000 for any property damage.
Other insurance policies cover other areas — collision and comprehensive insurance policies (a.k.a. full coverage insurance) cover the costs of vehicular damage but not passenger injury, and these plans can cost more due to their increased coverage. In fact, the general cost of car insurance will vary based on several factors, including your age, gender, driving history, or vehicle.
What Kind of Insurance Do Older Cars Need?
As your car ages, it probably doesn’t require the same type of insurance it may have needed when it was brand new. While a brand-new car tends to be more expensive to maintain, a used car is less so, especially if its parts are cheap and easy to obtain. Therefore, it’s worth weighing whether insuring your older car is worth the cost for you. In some cases, it may be cheaper to simply replace your vehicle if its value isn’t very high. However, insuring your car can give you peace of mind that savings can’t.
If your car is less than 10 years old, it’s probably worth it to insure. However, if it’s older than a decade, the cost of insurance may equal the cost of simply purchasing a new vehicle in case of an accident or mechanical breakdown. At a minimum, reducing your insurance coverage to liability only can help you save a significant amount of money.
Why Does the Cost of Car Insurance Decrease With Age?
Where brand-new cars tend to be the most expensive to insure because as cars increase in age, the cost of insuring them tends to decrease. This is because as vehicles age, their value depreciates. In fact, it’s said that the value of a brand-new car begins to depreciate as soon as you drive it off the car lot. As the car ages, it becomes less expensive to repair and thus, less risky for the insurance company to cover. Therefore, the older your car is, the less it tends to cost to insure. Of course, there are exceptions to this rule.
As one example, the cost of insuring classic or collector cars will always be much higher than insuring the average used car, as repair and maintenance are usually extremely pricey. Therefore, even though classic cars are some of the oldest cars, it doesn’t necessarily mean that they’re the cheapest to insure. Instead of getting a typical liability policy for a classic car, which may end up being pricey, classic car insurance can cover things such as restoration costs with a more accessibly priced policy, especially if the car isn’t being driven much or at all.
The Cheapest Old Cars To Insure (and the Most Expensive)
The general rule when determining the cost of insuring an old car is that the less popular your car is with thieves, the better. For older cars that are more reliable or have longer-lasting parts, the cost of insurance tends to be higher due to the increased chance that they’ll be stolen for parts. Some of the most expensive cars to insure for this reason include the 1998 Honda Civic, the 1997 Honda Accord, and the 2006 Ford F-150.
On the other hand, the cheapest older cars to insure include minivans and subcompact SUVs, such as the Subaru Outback or the Honda CR-V. In general, cars with higher safety ratings cost less to insure than vehicles such as sports cars, as they are less likely to be damaged in an accident. These rules tend to also apply to insurance for brand-new cars, with some new cars being cheaper to insure than others, depending on the brand, make, and model.
Quick Car Insurance at an Affordable Price in Illinois
Whether you’re in need of insurance for your older car or brand-new vehicle, American Auto Insurance provides quick and affordable car insurance with a wide variety of coverage options, including bodily injury liability, property damage liability, comprehensive physical damage coverage, collision coverage, rental reimbursement, and uninsured motorists coverage. Serving the entire state of Illinois, we have more than 30 years of experience under our belt and a Better Business Bureau A+ rating. We also provide SR-22 insurance, Which is required in Illinois for high-risk drivers, in case your driver’s license has been revoked or suspended and needs reinstatement.