The Importance of Used Car Insurance

Let's say you recently bought a 1965 Ford Mustang and you now painstakingly care for it. You wash and wax every Saturday, change the oil yourself, check the tire pressure-all so you can enjoy a Sunday morning drive. Or maybe you've needed an affordable second car for months so you can tow a trailer, and you just bought the perfect used pick-up. Or, you just needed a car for the drive to work, and you saw an advertisement for a used Honda Accord, which you remember from high school as the best car you've ever driven. You've solved needs and wants with these used cars. But what happens when you get into an accident with no used car insurance? No more Sunday cruises, no towing capacity, and maybe you end up taking a taxi to work. And probably not too many smiles, either. But if you take just a little time to shop around for adequate used car insurance, you'll bounce back in no time from a mishap-without spending too much money.

Why You Should Buy Car Insurance

Protecting yourself and your assets is the main reason to purchase used car insurance, but there's also a legal one. In most states, car insurance is required by law. The amount of coverage needed differs state to state, but usually includes a minimum amount of bodily injury liability coverage as well as property damage liability. Some states also require coverage for uninsured and underinsured drivers. If you're caught driving without insurance, you'll probably receive a citation and fine, and may have your license suspended.

Cost Factors for Used Car Insurance

One of the most common reasons for someone to decide against insurance for a used car is cost. Some buyers think, I just saved money by getting a used car, so why should I add cost this great bargain? For starters, you won't pay nearly as much for used car insurance as you will for a new car. The replacement value of your car is always the starting point for an insurer. Cheaper cars are cheaper to replace, so coverage for them costs less. Still, some used cars will be worth a lot, so the premium may be high. In that case, think about shopping around for a new policy, since numerous insurers may make you a better offer.

Other car owners may think that their car isn't worth enough to cover. An 11-year-old Toyota 4Runner with chipped paint and squeaky brakes may not seem worth the same monthly premium after paying it for three years. Remember, used car insurance isn't just for your car; it also protects you against damages and medical expenses from other drivers involved in an accident. And a used SUV can usually do just as much damage as a new one. If the cost of you r policy is still too high, and you think that you shouldn't be paying the same premium for a car in less-than-premium condition, the smart tactic is to consider decreasing your collision/comprehensive coverage-or even eliminating it altogether, and keeping only liability coverage.

The Finer Points

When you buy used car insurance, the premium is lower because insurers can charge less for comprehensive and collision coverage. A totaled car isn't a huge worry when the value of that car is low. But at the same time, liability rates are generally the same, since a used car can still cause damage. So what should you do to find the right coverage at the right price? To start, think about raising your deductible. If you're willing to pay a $1,000 deductible rather than $500, you may save hundreds of dollars on your annual premium. Also, you're less likely to worry about filing a claim for, say, a dented bumper if that bumper already had dings from the previous owner. So, you'll likely encounter fewer scenarios in which you want to file a claim and will have to pay that deductible.

Look Far and Wide

Most insurers will be willing to offer used car insurance, so you're probably going to have many options. If you want to know which of these insurers most value a higher deductible, or are more flexible with collision coverage, you'll have to compare quotes. will compare for you-for no cost-if you simply enter your personal and car information one time. For the driver who appreciates a good bargain, saving both time and money makes perfect sense.