Older cars are usually cheaper to insure because they're worth less, so collision and comprehensive coverage costs less to replace them

The main reason insurance drops for older cars is simple math: if your car is worth $5,000 and gets totaled, the insurer pays out $5,000. If your car is worth $35,000 and gets totaled, they pay out $35,000. Collision and comprehensive coverage — the parts that protect your car itself — are priced based on what the car is worth. A 2008 sedan will have much lower premiums for these coverages than a 2023 model of the same type.

However, liability coverage (which pays for damage you cause to someone else's car or property) doesn't drop as much with age. A 70-year-old driver in a 15-year-old car still poses the same risk to other people as a 70-year-old in a new car. So while your overall bill goes down, the savings come mainly from the collision and comprehensive portions, not from liability.

There's also a practical threshold: once a car reaches a certain age or mileage, many owners drop collision and comprehensive altogether because the premiums approach or exceed what the car is actually worth. At that point, you're only paying for liability, which is the cheapest part of any policy.

Key Takeaways

  • Collision and comprehensive premiums drop as your car's value decreases, which is the primary reason older cars cost less to insure.
  • Liability coverage does not decrease significantly with car age because it protects other people, not your vehicle.
  • Once a car is old enough, the cost of collision and comprehensive coverage may exceed the car's actual value, making it sensible to drop those coverages.
  • A car's condition, safety features, and repair costs also affect premiums, so two 10-year-old cars can have different rates.
  • Your driving record, location, and age matter far more than the car's age when determining what you pay overall.

When dropping collision and comprehensive makes financial sense

Most insurers recommend dropping collision and comprehensive when the annual premium for those coverages reaches 10 percent of the car's market value. If your 2010 Honda is worth $8,000 and collision costs $1,200 a year, you're paying 15 percent — a sign that you're spending more on insurance than the car is worth.

Before you drop these coverages, consider your financial situation. If you have a loan or lease on the car, your lender will require collision and comprehensive, so you have no choice. If you own the car outright and have savings to replace it if it's totaled, dropping coverage makes sense. If you couldn't afford a replacement car tomorrow, keeping the coverage is worth the cost even if it seems high.

Also factor in your local accident and theft rates. If you live in an area with high theft or frequent accidents, comprehensive and collision protect you even on an older car. If you park in a garage and drive carefully on low-traffic roads, the risk is lower and dropping coverage is a more reasonable gamble.

Repair costs and safety features still affect older car premiums

Not all older cars are cheap to insure. A 2015 luxury sedan with expensive parts and complex repairs might cost more to insure than a 2018 economy car, even though it's older. Insurers look at repair costs, not just the car's age. A fender-bender on a car with $3,000 in damage will raise premiums more than one on a car with $800 in damage.

Safety features also matter. An older car with modern safety technology — backup cameras, automatic emergency braking, stability control — may have lower premiums than an older car without these features, because the technology reduces accident severity and frequency. Conversely, an older car without these features costs more to insure because it's statistically involved in more accidents.

The car's model also plays a role. Some older models are targets for theft, which raises comprehensive premiums. Others have high repair costs because parts are hard to find or labor-intensive to replace. When shopping for an older car, ask your insurer what the premium would be before you buy — the savings on the purchase price can disappear if insurance is unexpectedly high.

How your age and driving record matter more than the car's age

Your personal factors — age, driving history, location, and how much you drive — have a much bigger impact on your premium than whether your car is 5 years old or 15 years old. A 25-year-old with two accidents in the past three years will pay more to insure a 2015 car than a 60-year-old with a clean record will pay to insure a 2005 car.

Young drivers see the biggest premiums, regardless of the car. Insurers charge more for drivers under 25 because statistics show they have more accidents. As you age and your driving record stays clean, your rates drop year after year — often more noticeably than if you bought a newer car. A 40-year-old with no accidents will get a better rate on a 10-year-old car than a 22-year-old on a brand-new one.

Where you live also matters more than car age. Urban areas with high theft and accident rates have higher premiums across the board. Rural areas have lower premiums. If you move from a city to the suburbs, your premium drops even if you keep the same car. If you move from a small town to a major city, it goes up.

The real cost of keeping an older car on the road

Lower insurance premiums are one advantage of older cars, but don't assume the total cost of ownership is lower. Older cars need more maintenance: tires, brakes, batteries, and fluid changes come more often. Unexpected repairs — a transmission issue, a water pump failure — can cost hundreds or thousands of dollars. Some months you might pay $150 in insurance but $800 in repairs.

Newer cars have higher insurance premiums but often come with warranties that cover major repairs for several years. They also need less routine maintenance. Over a five-year period, the total cost of ownership — insurance, maintenance, repairs, and fuel — might be similar between a new car and an old one, or the new car might actually be cheaper.

Factor in reliability when deciding whether to buy an older car. If it's a model known for longevity and you've had it inspected by a mechanic, the lower insurance premium is a real savings. If it's a model with a history of expensive repairs, the insurance savings will be eaten up by maintenance costs.

How to lower insurance costs on an older car

Even if your older car qualifies for lower premiums, you can reduce them further. Bundling your car insurance with home or renters insurance typically saves 10 to 25 percent. Raising your deductible — the amount you pay out of pocket before insurance kicks in — lowers your premium. If you raise your collision deductible from $500 to $1,000, your premium drops, but you'll pay more if you have an accident.

Ask your insurer about discounts for safety features, even on older cars. Some insurers offer discounts if your car has anti-theft devices or if you install a telematics device that monitors your driving. Low-mileage discounts apply if you drive fewer than a certain number of miles per year — often 7,500 or 10,000. If you work from home or use public transit most days, you might may have access to.

Shopping around every one to two years is one of the most effective ways to save. Rates change, and insurers offer different discounts. Getting quotes from three to five insurers takes an hour and can save hundreds per year, especially on an older car where the premium is already lower and a small percentage difference means real money.

Frequently Asked Questions

At what age does a car become cheap to insure?

There's no specific age — it depends on the car's market value and your insurer's pricing model. Most cars see significant insurance drops after 10 years, and especially after 15 years. A 2009 car will almost certainly be cheaper to insure than a 2019 car, but the exact amount varies by model, your location, and your driving record.

Should I drop collision and comprehensive on my 12-year-old car?

Only if the annual premium for those coverages is more than 10 percent of what the car is worth and you have savings to replace it if it's totaled. If you have a loan on the car, your lender won't allow you to drop them. If you couldn't afford a replacement, keep the coverage even if it seems expensive.

Why is my older car more expensive to insure than my friend's newer car?

Your driving record, age, location, and the specific car model matter far more than age alone. If you've had accidents or tickets, you'll pay more. If you live in a high-crime area, you'll pay more. If your older car is a model that's expensive to repair or commonly stolen, it will cost more to insure than a newer economy car.

Does insurance go down every year as my car gets older?

Generally yes, but not always by the same amount. Insurance drops most noticeably in the first five years as the car depreciates fastest. After that, the drops slow down. At some point — usually around 10 to 15 years — the premium levels off because you've already dropped collision and comprehensive, and you're only paying for liability.

Is it cheaper to buy an old car to save on insurance?

Not necessarily. While insurance is cheaper, older cars need more repairs and maintenance. Over several years, the total cost of ownership — insurance, repairs, maintenance, and fuel — might be similar to a newer car or even higher. Buy an older car because you want to avoid a car payment or because you found a reliable model, not just for insurance savings.