Car insurance

[imported_goku]

Explain. I've been told that if you get full coverage that it's the same premium on a new car as an old car, I've also been told that if you have an older car, you pay less in insurance. The reason I ask this is because my dad has decided to go liability only on one of our cars and I fail to understand why. If it's cheaper since it's and old car, I don't see whats the big deal. Hell if the car gets totaled, I can fix it and let it get totaled agian and agian and so on 😛

 

[mrchan]

Liability only because it isn't worth the extra payment to get full coverage? Because no one will steal it, no one will break into it. Because if you get into an accident that is your fault, the replacement cost is so low that it isn't worth the cost of full coverage. Because if you get minor damage you won't fix it. If a car gets totaled, its value to an insurance company is VERY VERY low. You could spend 10k fixing it, but if it got stolen or totaled again, they'd give you like 2k for it.

 

[jagec]

Full coverage is even more dependent on the age of the car than liability, but both are affected.

However, it's still not worth getting full coverage on an older car, unless it's rare or you really, REALLY love it. Comprehensive, yes, collision, no.

Remember, collision won't pay a penny more than the cost of a replacement car. So, assuming you're a bad driver and get into an at-fault accident, you get...what? $2k? For your older car. You've almost certainly paid far more than that for insurance coverage, by that point.

Since older cars aren't worth a lot, it's cheaper to just cover the cost yourself. Theoretically you could do this for new cars, too, over a few accident-free years, but few people like keeping $15k+ in the bank just in case they screw up and crash their new car. Insurance is much more convenient.