Full coverage car policy is an effective way for drivers to replace their vehicles after an accident without having to pay the entire monetary value of a raw car .
however, ValuePenguin discovered that after a car is more than 10 years erstwhile, it may be a better investment to switch to liability-only coverage cable car insurance or consider purchasing a newfangled vehicle .
According to an analysis of how the cost of indemnity and the value of a car variety over time, the annual cost of carrying full coverage car insurance on a midsize vehicle can approach 50% of the car’s value after more than a decade. furthermore, the combined price of car policy and the deductible you have to pay for an at-fault accident is likely to be more expensive than the value of your vehicle if it ‘s more than 10 model years erstwhile .

Key findings

The difference between the cost of insurance and the value of the car

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Full coverage insurance for older cars is often too expensive

A comparison of the price of indemnity and the prize of an cover vehicle reveals that full coverage is a worthwhile investment for cars that are a decade erstwhile or newer. On average, the cost of insuring a 5-year-old midsize cable car with a broad coverage policy is $ 2,010 a class. however, the average value of these cars is $ 7,501 .
More importantly, if your car was totaled and you had to make a car insurance claim, it would silent be practical to replace your car after an at-fault accident — one where you were creditworthy for the crash and would have to rely on your comprehensive or collision coverage to reimburse you for expenses — if it were a ten old or newer, tied considering the future monetary value hike and deductible .
What is a deductible? A deductible is the sum you have to pay before your insurance begins paying for losses, such as price that ‘s covered by your car insurance ‘s comprehensive examination and collision provisions. In this cogitation, the sample policyholder was responsible for a $ 500 deductible, but your deductible could be up of $ 2,000 .
ValuePenguin calculated that the distinctive cost of indemnity for a midsize cable car increases by 93 % after an at-fault accident. When factoring in the monetary value of the deductible, the annual cost of insuring a 5-year-old car inflates to $ 4,389, on modal. Although the fresh insurance rate in this position would amount to 59 % of the car ‘s prize, drivers would save $ 3,111 compared to the monetary value of replacing the bust up cable car out of pocket. This is more than the $ 3,000 or less that more than half of U.S. consumers have in their savings and checking accounts, according to the Consumer Financial Protection Bureau .
How the cost of full coverage car insurance and the value of a car change over time
After a decade, however, the top of carrying wax coverage for a vehicle diminishes. Ten-year-old cars have an average measure of $ 5,067 and cost $ 1,758 a year to insure before an accident. policy premiums equate to 35 % of the car ‘s measure for drivers with uninfected records but increase to 79 % after a crash .
In other words, just $ 1,131 — which includes the deductible — separates the value of a decade-old car from the cost to insure it. In our analysis, the opening between the monetary value to insure a Honda Civic and its value was $ 2,405, but models from Ford, Chevrolet and Toyota fared more ailing. For the Fusion, Malibu and Corolla, the measure of one ‘s vehicle was alone $ 706 more than the policy price .
For some drivers, it may be more economical to pay for a newfangled car out of pocket than it would be to commit to higher future insurance premiums after an accident .
between 10 and 15 years after a vehicle ‘s mannequin class, broad coverage is a hapless investment. While the cost of full coverage by itself likely wo n’t be more than what a cable car is worth, the cost of insurance is more probable to be higher than the value of the cable car after an accident. The cost of insuring a 15-year-old car after an accident represents 105 % of the car ‘s value, on average.

As one ‘s cable car ages, it becomes increasingly unmanageable to justify paying for broad coverage. A driver would pay higher premiums for full coverage lone to be ineffective to use their policy to amply cover the cost to replace their car if it were totaled. After two decades, the price of full coverage cable car policy would equal 141 % of a fomite ‘s value. After 25 years, ValuePenguin estimates that the cost of entire coverage indemnity would be 188 % of the car ‘s value .

Benefits of switching to minimum coverage insurance

It ‘s financially smart to keep car policy that includes comprehensive and collision coverages on vehicles that are younger than a ten. The cost of insuring a 5-year-old cable car equates to 27 % of the car ‘s value .
Trade in cars
After 10 years, the annual price of cable car insurance represents 35 % of a distinctive car ‘s value. While we do n’t expect that the price of insuring a cable car will eclipse the value of the vehicle until it ‘s more than 25 years old, the premiums one pays take up a larger proportion of the vehicle ‘s prize as meter goes on. For major brands, vehicles that are between 20 and 25 years old could see indemnity prices that equal more than three-fourths of their vehicle ‘s value .
For example, the cost of policy on a 15-year-old car totals 46 % of thea cable car ‘s value, while the driver of a 20-year-old car could pay rates that add up to 60 % of their fomite ‘s rate. In fact, depending on the gain and exemplar of the cable car, the size of one ‘s policy premium varies. We discovered that insuring a 25-year-old Ford Fusion could cost 100 % of the car ‘s value before any claims were made on the policy .
As an alternative to purchasing a newly fomite, drivers ( specially those without a history of accidents or citations ) may find it to be a better investing to switch to a minimal coverage policy — one that offers alone indebtedness coverage. Under a minimum coverage policy, a driver ‘s insurance would only pay for price they caused to another person. In retort for less protection, the rates for a minimum coverage policy are much cheaper than those for entire coverage .

Cars models that hold the most value

Our analysis revealed that the Honda Civic depreciated in value at a pace of 29 % per five years, on average. This was the lowest rate of disparagement compared to the Toyota Corolla, Chevrolet Malibu and Ford Fusion, which were likely to lose 34 % of their rate year over class, on modal .
We found that buying full moon coverage for a Civic was besides the best investment over a 15-year time period. After 15 years and one at-fault claim, the respect of a Civic was still $ 947 more than the cost of indemnity. All other models at this senesce were probably to be more expensive to insure than what they were deserving .
conversely, when comparing car indemnity rates with its competitors, we found that the Honda Civic was the most likely to see higher insurance prices. ValuePenguin found that the cost of car indemnity for a Honda Civic would decrease by just 11 % per five-year period of the car ‘s life. By comparison, the price of insuring the Toyota, Chevrolet and Ford models decreased by 13 % during the like period .

Frequently asked questions

Are older cars cheaper to insure?

Yes, most older cars are cheaper to insure, particularly in terms of comprehensive examination and collision insurance. Cars lose rate as they age, so the potential indemnity payouts after an accident devolve a well. This is not the case with many classic or collector cars.

Should I have full coverage on a 15-year-old car?

Most of the time, it is n’t a beneficial function of money to have full coverage on an older car. After an accident, you will likely get the actual cash value of the vehicle, which is normally not that a lot more than the excess cost of the insurance.

Can I get full coverage on an old car?

You can get full coverage on an older car. It might not be particularly worthwhile, as premiums will approach or sometimes exceed the value of the vehicle.

How much car insurance do I need for an older car?

The merely indemnity you normally need is indebtedness coverage and, in some states, personal wound protection. Full coverage is often recommend, but it becomes much less valuable financially with an older car.


ValuePenguin gathered car indemnity rates for drivers of midsize sedans from the country ‘s top-selling brands in California. We got quotes for a Honda Civic, Toyota Corolla, Ford Fusion and Chevrolet Malibu. We used Kelley Blue Book ‘s Fair Purchase Price to determine the fair prize of these vehicles. We checked how the value of these vehicles and the annual price to insure them changed from 2010 to 2015 to 2020 in order to find an average rate of decay .
With this rate of decay in mind, we projected the cost of policy and the value of each vehicle after five, 10, 15, 20 and 25 years to estimate the point when fully coverage becomes besides dearly-won compared to the value of the vehicle before and after an at-fault accident .
ValuePenguin ‘s analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurance company filings and should be used for comparative purposes only, as your own quotes may be different .

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