Are Older Cars Cheaper to Insure Than New Cars?

Updated April 1, 2022

Are older cars cheaper to insure: elderly man in his car

If you’re looking for ways to save money on car insurance, you might be wondering, “Are older cars cheaper to insure than new cars?” Swapping out your new vehicle for an older one might seem like a good way to lower your car insurance rates, but that isn’t always the case. There are other factors to consider too, such as what type of vehicle it is and what type of coverage you need.

In general, an older model year will cost less to insure than a brand new version of the same car — but over time, the cost of insuring it may increase as its repair costs go up and it gets harder to find replacement parts for it.

Here’s what you need to know about insuring an older vehicle, and whether or not you need full coverage auto insurance to keep your car on the road.

Are Older Cars Cheaper to Insure?

Before we answer if older cars are cheaper to insure, let’s get clear about what kind of cars we’re talking about. After all, there’s a big difference between a used Tesla Model 3 and a 20-year-old Chevrolet that you’re keeping for sentimental value.

Here are three types of older vehicles that you may need to insure:

Used cars

A used car is any vehicle that you’ve bought on the secondhand market. Since a used car isn’t necessarily an old car, it may not be significantly cheaper to insure it compared to a newer vehicle. After all, a used sports car or electric car will still be expensive to repair or replace if it gets into an accident.

Still, you can expect your insurance premiums to decrease by around $10 per month as the car ages — from an average cost of $208/month for a 2022 vehicle to $149/month for a 2012 car. You can use this tool to compare used car insurance costs for your specific model:

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Older cars

When it comes to cars that are actually old — say, at least a couple of decades — then it gets a little more complicated. Maybe you have a trusty pickup truck or station wagon that you just can’t bear to get rid of. Is it worth holding onto it for a few more years?

That depends on the make and model. On the one hand, older cars usually lack safety features and anti-theft features that insurers use to predict your likelihood of making a claim. But those same features tend to be expensive to fix. So if an older car doesn’t have any high-tech features to replace, it may not cost as much to insure.

The exception is if your car is so old that replacement parts are hard to find. If the car’s manufacturer has gone out of business or doesn’t make that model anymore, then car insurance companies may charge you more to insure it.

Since every old car is different, you’ll need to compare car insurance quotes to decide whether or not it’s worth keeping your old vehicle.

Classic cars

Finally, there are classic cars, which are an entirely different story. These cars definitely fall into the category of “hard to repair and replace,” which usually drives up the cost of car insurance. But if you leave it parked in your garage most of the time and you only take it out for special occasions, you may be able to get a lower premium.

It’s worth asking your insurer if they have a classic car insurance policy that meets your needs. You may need to get the car appraised in order to determine what your insurer will pay out if you make an insurance claim. Many times, classic cars that aren’t driven often require specialized policies.

Factors That Affect Car Insurance for Older Cars

Woman opening a car's trunk

As with any car, there are several factors that impact your car insurance premiums that have nothing to do with the age of the car or type of vehicle you drive. These include:

Your age. Young drivers typically pay more for car insurance than experienced drivers. That means a teenage driver behind the wheel of an old Honda Civic may pay more in car insurance than an adult driving a new Toyota Prius.

Your location. Auto insurance rates vary widely by location, so the city and state you live in can have a big impact on your insurance prices. Newer cars may be especially costly to insure if you live in an area with high rates of crime or natural disasters. Find an auto insurance guide for your state for more information.

Your driving history. Accidents and speeding tickets can increase your car insurance rates, even if you drive an older vehicle. You may be able to take a defensive driving course to reduce the impact of any moving violations on your driving record.

Your finances. In some states, insurers are allowed to check your credit history when setting rates. If you’re a homeowner, you may be able to get a multi-policy discount by bundling your car insurance with other types of coverage.

So, when it comes down to it, are older cars cheaper to insure? For the most part, yes — but it’s only one factor among many that determine your car insurance rates.

Types of Insurance Coverage for Old Cars

The most important thing to consider when insuring an old car is what type of coverage you’ll need. When you buy or lease a new car, you’ll usually be required to maintain a high level of coverage to reimburse the lender if you total the car.

But with an older car that you own outright, you have more options, and you may be able to reduce or drop certain types of coverage significantly.

Liability coverage. Liability insurance is mandated by state law since it protects you if you get into an accident and damage someone else’s vehicle. You’ll need to maintain this type of coverage regardless of how old your car is, but you can lower your costs by choosing a higher deductible.

Collision coverage. Collision insurance will cover the cost of repairs to your car if you get into an accident. As the value of your old car declines, it may not be worth it to pay for high levels of collision coverage. We recommend dropping your collision coverage when your annual insurance payment is 10% or more of your car’s value.

Comprehensive coverage. Finally, comprehensive coverage takes care of the cost to replace your vehicle in the case of theft, natural disaster, or other extreme circumstances. If you don’t feel attached to your old car or plan to replace it soon anyway, then you can save money by eliminating this type of coverage.

Compare Insurance Rates Before You Buy

Are older cars cheaper to insure: person handing a key to another person

Whether you already own an old car or are thinking of buying one, estimating the cost of insuring it can be tricky. For every factor that lowers your insurance costs, there may be another factor that increases it. Everything from the make and model of the car to your location can determine your insurance premiums.

The best way to estimate your auto insurance rates is to compare quotes from multiple insurance providers. Our handy comparison tool makes it easy to find the cheapest car insurance rates by comparing them all side-by-side.

Simply enter your ZIP code below to find the best rates on car insurance.

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