How to insure an older car

Craig Guillot
With saving money becoming more important than ever in these tough economic times, it’s become less of a priority for Americans to buy new cars. Nowadays, many drivers have six digits on their odometers and have no intention of visiting the car lot anytime soon.
As a vehicle gets older, insurance experts recommend re-evaluating the need for comprehensive insurance, which covers such things as fire and theft, and collision insurance, which covers damage to your car if it's involved in an accident with another car or object. Keep in mind that experts never recommend lowering your liability insurance, which covers damage that you cause to another car or object. In any case, as your vehicle ages, you'll want to annually evaluate your coverage.
Vehicles last longer, are driven longer
Outside of financial reasons, more Americans are deciding to drive their vehicles longer because today’s cars and trucks are designed to last longer. According to Experian Automotive, an automotive information service, the average age of the 245 million vehicles on U.S. highways reached 11 years in the first quarter of 2012. That's an increase of more than two months from the previous year.
At automotive website Edmunds.com, engineering editor Jason Kavanagh says many modern vehicles – basically those built within the past decade – are designed to run for 150,000 to 200,000 miles without major repairs. These numbers assume that the driver is maintaining the vehicle properly — changing the oil and replacing parts as indicated by the owner's manual.
"They are getting better at building, designing and testing cars for longer lives. 100,000 miles is really just getting started these days," he says.
Dropping collision and comprehensive
As a vehicle gets older, it eventually will become less valuable than the annual cost of comprehensive and collision coverage. At that point, it usually makes more financial sense to drop this coverage completely. Carroll Lachnit, features editor at Edmunds.com, says it's a personal decision that can depend on the value of the car, the cost of the coverage and the deductible you carry.
Billy Van Jura, owner of the Birchyard LLC insurance agency in New York, recommends that drivers annually evaluate coverage for vehicles more than 10 years old.
“People tend to keep their comprehensive (coverage) a little longer if it’s really cheap. If you’re only paying $100 per year, it may be worth it,” he says.
Van Jura also says you’ll still need to maintain liability insurance to meet state minimums. Every state except New Hampshire requires a certain amount of liability coverage. In most cases, you’ll want to buy even more than the minimum coverage to protect yourself and your assets in the event you injure someone in an accident.
“I don’t care if you’re driving a 2012 Corvette or a 2000 Honda Civic. If you’re a homeowner and have assets, you should have enough liability insurance. It doesn’t matter how old your vehicle is,” Van Jura says.
Newer vehicles boast safety features
Assuming the vehicle is well-maintained and doesn't have major flaws, there's nothing dangerous about driving an older vehicle, Lachnit says. However, compared with a newer vehicle, a 15-year-old car probably offers fewer safety features.
Lachnit says the "threshold" for many safety features is 1998, the year when front air bags first were required in vehicles. Other newer safety features include side air bags, electronic traction control, head injury protection and head injury restraints.
Many insurers offer discounts for certain safety features. Aside from air bags and anti-lock brakes, some insurers provide discounts for automatic seat belts, crash-resistant doors and air bag shutoffs.
Loretta Worters, a spokeswoman for the nonprofit Insurance Information Institute, says that while a newer vehicle might give you lower liability premiums because of its safety features, the cost of comprehensive and collision coverage likely outweigh any price difference. In any case, insurance shouldn’t be a factor in deciding whether to keep driving your vehicle.

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