Is Car Insurance Cheaper for Older Cars?

Why Older Cars Cost Less to Insure

Insurance premiums for comprehensive coverage and collision coverage are based largely on your vehicle's actual cash value (ACV)—what it would cost to replace if totaled.

As cars age, their market value declines due to depreciation. A 10-year-old car is worth significantly less than a new one, so the insurer's maximum payout (and therefore your premium) is lower.

How Vehicle Age Affects Premiums

Here's how each type of coverage changes with vehicle age:

Comprehensive and collision: Decrease as the car's value drops. These coverages protect your vehicle, so lower replacement costs mean lower premiums.

Liability: Stays roughly the same regardless of vehicle age. Liability covers damage you cause to others, not your own car.

Medical payments / PIP: Unaffected by vehicle age. These cover medical costs for you and your passengers.

Uninsured motorist: Unaffected by vehicle age. This covers injuries and damage caused by uninsured drivers.

When Older Cars Might Cost More

Not all older cars are cheaper to insure. Premiums can be higher if:

• Lack of safety features: Older cars without airbags, anti-lock brakes, or electronic stability control may cost more due to higher injury risk
• Higher theft rates: Some older models (e.g., Honda Civic, Toyota Camry from the 1990s) are stolen frequently, raising comprehensive premiums
• Expensive or rare parts: Classic or exotic cars can be costly to repair, even if their market value is moderate
• Poor crash test ratings: Vehicles with low safety scores may face higher premiums

When to Drop Full Coverage on an Older Car

Once your car's value falls below a certain threshold, paying for comprehensive and collision may not make financial sense.

Rule of thumb: Consider dropping full coverage if your car's value is less than 10× your annual collision/comprehensive premium.

Before dropping coverage, consider:

• Do you have savings to replace the car if it's totaled?
• Can you afford to be without a car temporarily?
• Does your lender require full coverage? (If you have a loan or lease, you must carry it.)

For more detail, see our guide on full coverage vs liability.

Liability-Only Coverage for Older Cars

Switching to liability-only insurance means you drop comprehensive and collision, keeping only the coverage required by law.

What liability covers:

• Bodily injury to others if you're at fault
• Property damage to others' vehicles or property
• Legal defense if you're sued after an accident

What liability does NOT cover:

• Damage to your own car from a collision
• Theft, vandalism, or weather damage to your vehicle
• Your own medical expenses (unless you have medical payments or PIP)

Liability-only policies are ideal for older, low-value cars where replacement costs don't justify the premium.

How to Lower Insurance on Older Cars

If you're insuring an older vehicle, these strategies can reduce costs:

• Compare quotes: Rates vary significantly by carrier—shop around
• Raise your deductible: A higher deductible lowers your premium
• Ask about low-mileage discounts: Older cars often aren't driven as much
• Drop unnecessary coverage: If your car is worth <$3,000, consider liability-only
• Bundle policies: Combine auto + home for 15–25% savings
• Improve your credit: Better credit = lower rates in most states

For more strategies, see our guide on how to lower car insurance.

Classic and Collector Car Insurance

If your older car is a classic or collector vehicle, standard auto insurance may not provide adequate coverage. These cars often appreciate in value rather than depreciate.

Classic car insurance offers:

• Agreed value coverage (no depreciation)
• Lower premiums for limited-use vehicles
• Coverage for spare parts, restoration costs, and car show travel

Eligibility typically requires the vehicle to be 15+ years old, in good condition, and driven fewer than 5,000 miles annually.

Frequently Asked Questions