Car insurance... pfft...

[Jeff7181]

I'm getting my 2000 Mitsubishi from my brother this weekend. Just got insurance on it... with my discount cause my mom works at the insurance office, and being 22 years old with a clean driving record, it's going to be $1600 per year. Not bad for my age I guess. But... the car is only worth $7000. So the way I figure... I'll keep full coverage for about 6 months or so until I have some money saved up (and steady income)... then I'll ditch full coverage and just go to the bare minimum for $600 per year. I'll keep putting that same amount of money (maybe even a bit more if I can afford it) into savings so if I do get in an accident I can use that money for repairs. And while it's just sitting there waiting to be used, I'm earning interest on it. And if I never use it, I can use it to buy another car in 5-6 years and not have to pay interest on a loan to do so

Just seems like a waste to me to throw an extra $1000 away every year whether I need to make a claim or not. I'll never ever see that money again, whereas if I put it away, if I don't use it, it's still there, and I can use it for something else.

Any problems with my method? Assuming I wait to drop full coverage until I have 5-6 grand put away that I can afford to spend on car repairs or even buy a new car.

 

[rh71]

Full coverage is always expensive and should be left to the new car owners. You mention $600/year for liability only.. I pay $600/6 months... so I don't know what you're complaining about.

 

[Jeff7181]

Originally posted by: rh71
Full coverage is always expensive and should be left to the new car owners. You mention $600/year for liability only.. I pay $600/6 months... so I don't know what you're complaining about.

Oh I wasn't complaining about the $600 per year, that's reasonable to me... $1600 per year isn't, since in 5 years I'd have paid more insurance than the car is even worth =) My mom keeps telling me I should have full coverage... but I think she's in the mindset that everyone needs full coverage no matter what since she works for an insurance office =)

 

[rh71]

I understand that, but the point is I'm almost paying your full coverage price to get liability only. The car is 9 years old and I'm > 25.

If the car is in great shape inside and out, and depending on your area, I'd do full coverage for that price. I think full coverage for a new car around here is $3k+ for a young driver.

 

[C'DaleRider]

The only flaw is going to bare minimum liability..........IF you have an accident and IF it's your fault and IF the other person(s) is/are injured, that bare minimum ins. coverage will be eaten up in a heartbeat, leaving you to cover the balance. And if the injuries/property damage is significant, you could potentially be paying that off for years to come.

I don't disagree with you dropping the comprehensive/collision from your policy, I'd just make sure my liability is set very high.....the minimum liability we carry is 100K/300K/50K......penny wise, pound foolish.

Also remember, court judgements are not revoked on bankruptcy declarations, if you were to think that..........they'll just track you via your taxes and garnish your wages forever, or until that $250,000 settlement/judgement is finally paid off.

 

[moonshinemadness]

To insure me on my car(1.8TD Escort) full comp i would be paying around £2500 - £3000 per year i have no no claims and i currently get 80% discount (40% employees benefit ((My step dad)) and 40% for doing pass plus ((Advanced Driving))) and i pay £960 per year

 

[Jeff7181]

Originally posted by: C'DaleRider
The only flaw is going to bare minimum liability..........IF you have an accident and IF it's your fault and IF the other person(s) is/are injured, that bare minimum ins. coverage will be eaten up in a heartbeat, leaving you to cover the balance. And if the injuries/property damage is significant, you could potentially be paying that off for years to come.

I don't disagree with you dropping the comprehensive/collision from your policy, I'd just make sure my liability is set very high.....the minimum liability we carry is 100K/300K/50K......penny wise, pound foolish.

Also remember, court judgements are not revoked on bankruptcy declarations, if you were to think that..........they'll just track you via your taxes and garnish your wages forever, or until that $250,000 settlement/judgement is finally paid off.

Liability covers $300,000 it says =)

 

[Jeff7181]

Originally posted by: moonshinemadness
To insure me on my car(1.8TD Escort) full comp i would be paying around £2500 - £3000 per year i have no no claims and i currently get 80% discount (40% employees benefit ((My step dad)) and 40% for doing pass plus ((Advanced Driving))) and i pay £960 per year

I have no idea what that would be in US dollars =)

 

[dullard]

Insurance is always a gamble. In the long run for most people you lose money on the insurance gamble (since the insurance company takes out money to pay its employees). But the catch is if you don't play the game you still have a huge percentage chance of losing really big. Suppose you drop full coverage and the next day you had a large collision. In that case you saved <$3 for the day but you also just lost a $7000 car. I personally feel that I wouldn't take that chance and in your case I'd get full coverage. My cutoff is roughly around a car worth $5000. Full coverage above that and liability only below that.

 

[Doggiedog]

You think thats bad? All-State (worst insurance co) wanted to charge me $7500/yr for full coverage on my new 97 Prelude SH when I was 27. I had a license for 9 years with no accidents or tickets of any kind. It was unbelievable. I went to Geico instead for $2700/yr. All-State will never get my business after that.