The Insurance Bulletin
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How Much Is Used Car Insurance?

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Jessica Martel
Updated September 18, 2022
5 Min Read

On the market for a used car? Don’t forget to factor in the cost of car insurance. Before you can drive away in a new-to-you used car, you will need to fulfill the minimum car insurance requirements for your state. While car insurance is typically cheaper for a used car versus a new car, this is not always the case. When determining the cost of used car insurance, the make and model of your car can mean more than whether or not it’s new or used.

How much does used car insurance cost?

In general, older used cars cost less to insure than newer cars. This is because older cars are typically less valuable than newer ones. Many older cars also lack some of the safety features that are included in newer cars. While these safety features can help to reduce the likelihood of an accident, they can also be costly to repair.

Another reason used cars are cheaper to insure is because cars depreciate. As they depreciate and are worth less and less, many drivers choose to decrease the amount of insurance they keep on the car. As the car gets older and loses value, the maximum you can receive from comprehensive and collision insurance drops. At a certain point, it can make financial sense to remove comprehensive and collision insurance and only keep basic liability insurance.

The age and value of your car are not the only factors used to determine the cost of insurance. Other factors include:

  • Type of vehicle. If you are an antique car collector or you want to purchase a specialty or vintage car, these cars can be more valuable than a newer vehicle. They can also cost more to repair or replace which can drive up the cost of insurance. In addition, if you own a classic car you might consider getting a classic car policy, which can be more expensive than regular insurance.
  • Driving history. Do you have a clean driving record or one spotted with tickets, accidents, and insurance claims? The cleaner your record, the cheaper your vehicle insurance is likely to be.
  • Driver demographics. Age, gender, and even marital status can factor into how much your insurance will cost. Younger drivers typically cost more to insure because they are less experienced and are more likely to get into a car crash.

Do you need insurance to buy a used car?

While you can typically purchase a used car from a private seller before you have car insurance, you will need insurance before you can register or drive your vehicle. Driving without at least the minimum amount of insurance required by your state can result in fines and license suspensions. If you get in an accident without insurance you face major financial consequences and even potential jail time.

If you are purchasing a used car from a dealership, you will generally need to provide proof of insurance before you’re allowed to drive off the lot.

If you already have car insurance, you should contact your insurer to inform them you’ve bought a used car and have them add it to your insurance policy.

How to get insurance before buying a used car

Getting a quote for how much your car insurance could cost before you purchase a used car can help you budget for the total associated with owning and driving a vehicle. You can do this by searching online or by speaking directly to an insurance representative. To get a personalized quote you will need to provide the vehicle identification number (VIN) or the specific make and model.

Once you decide which insurer you want to go with, many companies allow you to purchase insurance online. If you want to purchase insurance before you buy a used car, you will need to ask the seller for the VIN so you can provide it to your insurer. You can then choose when you want your policy to start. Just make sure you set it up to start before you drive your new-to-you car home.

How much auto insurance coverage do you need before buying a used car?

How much coverage you need will depend on your state’s requirements as well as your personal preference. At the very least, you will need to purchase minimum coverage. In every state except Virginia and New Hampshire, minimum coverage includes liability insurance and some states require additional types of coverage.

Liability insurance is a combination of bodily injury liability and property damage liability. Bodily injury insurance would help cover medical expenses if you caused an accident with another driver and injured them. It may also cover your legal fees if the other driver takes you to court as a result of their injuries. Property damage liability insurance helps cover the cost of repairs if you damage someone's vehicle or property in a car accident.

Just because Virginia and New Hampshire don’t require mandatory coverage doesn’t mean drivers are off the hook. In Virginia, drivers can skip purchasing car insurance if they pay the Department of Motor Vehicle (DMV) a $500 uninsured motor fee.

In New Hampshire, drivers are required to demonstrate that they have sufficient funds to meet the state's motor vehicle financial responsibility requirements ($50,000 for liability and $25,000 for property damage) in the event they caused an accident. If you can’t meet the requirements, your license may be suspended.

While you are not mandated to carry comprehensive or collision insurance, it can be worth it if you get into an accident or if your car is damaged in a storm and your car is still valuable.

Comprehensive insurance covers most non-collision-related incidents that cause damage to your vehicle. This can include anything from vandalism, to fire, to hitting a deer on the highway. Collision insurance helps to cover the cost of repairing or replacing your vehicle should you cause an accident with another vehicle, hit an object, or even if you roll over and damage your car.

The bottom line is most states require a minimum amount of coverage and the minimum varies. Then, it’s up to you to decide how much insurance you want and calculate whether or not extra insurance makes sense.

Compare car insurance rates for used cars

When shopping for insurance, it’s always a good idea to compare various companies. Different insurers provide different coverage options at different rates. If your goal is to save money and find the best deal on insurance, then take the time to get several quotes from various providers. If you move forward with the first quote you receive, there’s no way to know if you’re getting a good deal.

Insuring your used car

If you want to save money on a car and car insurance, a used car is usually your best bet. Buying an older, dependable car is going to be cheaper than buying a brand new car which loses more than 10% of its value after you drive it off the lot. Unless you’re buying an old collector car or a used rare sports car, you’re likely to save more money on insurance when you buy used. Comparison shopping for car insurance and maintaining a clean driving record are some of the best things you can do to help keep the cost of insurance down.