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Time to drop auto insurance?

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  • Time to drop auto insurance?

    I have two cars currently, both about 12 to 13 years old and fully paid for. I plan to drive them for 3 more years at least but maybe more.

    One of the cars does not have collision coverage but the other one does. Does it make sense to drop the collision insurance on that other car at this point as the car is so old and only worth about 2000 to 2500 now? Im paying $128/year just for collision coverage and I figured I could drop that down and just use the money to help fund other insurance policies like disability and life, both of which I am trying to enhance. The reason the first car doesn't have collision on it right now is because it was a salvage title and my insurance company said they wouldn't pay me anything if I got in an accident, so I declined it.

    As another thought, anyone else also drop comprehensive coverage too? Just curious if there's a point where this might also make sense given the declining value of the car. If I dropped this too on both cars, it would save 33% on the overall policy cost.

    I think I remember reading somewhere that after 8 years most cars aren't worth paying collision for... Maybe comprehensive too.

  • #2
    Yes!

    Although the decision to drop collision depends on your risk tolerance and financial situation - your cars are old enough that you would get very little for them should there be a major accident.  If you are in a position where you are able to purchase another vehicle should you total yours, I would drop the collision.

    I personally drop the collision on my vehicles once they are 4-5 years old.  I am comfortable with the risk, and am able to afford a replacement if necessary.  Comprehensive is usually very inexpensive.

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    • #3
      Yep.

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