Is it worth having collision insurance on a 10 year old car?
Asked by: Prof. Brayan Wunsch DVM | Last update: June 17, 2026Score: 4.8/5 (21 votes)
It's often not worth it to keep collision on a 10-year-old car if its market value is low and premiums are high, but it depends on your financial ability to repair/replace it, the car's actual cash value (ACV), your driving risks, and if you still owe money on it. Use the 10% rule: if the annual premium plus deductible exceeds 10% of the car's ACV, consider dropping coverage. If the car is essential, has high sentimental value, or you can't afford to replace it, keeping the insurance is wise.
Should I have collision insurance on a 10 year old car?
It all depends on the current value of your vehicle and the cost of collision coverage. If the value of the vehicle and the collision insurance cost justify it, then yes, you should carry it. Otherwise, dropping collision insurance on a highly depreciated vehicle, roughly 10 years old, is the right financial decision.
When should I drop comprehensive and collision coverage?
You should consider dropping collision and comprehensive insurance when your car's market value is low (e.g., under $3,000-$4,000) or if the combined cost of your premiums and deductible equals or exceeds 10% of the car's value, and you can afford to pay for repairs out-of-pocket, especially if the car is older (around 10 years) and paid off, as lenders often require this coverage for financed vehicles.
At what point does collision insurance stop being beneficial for a consumer?
Collision insurance stops being beneficial when the annual cost (premium + deductible) approaches or exceeds a significant portion (e.g., 10-20%) of your car's Actual Cash Value (ACV), especially for older cars, because the potential payout becomes minimal compared to the total out-of-pocket expense over time, meaning you're paying more for coverage than the car is worth, particularly if you can afford to self-insure repairs or replacement.
Why would you not want to have collision coverage?
If your vehicle is paid off, there are only a few instances that justify dropping collision coverage: Your vehicle's value is less than a few thousand dollars: If your car holds minimal value, collision coverage may not be worth carrying. This is especially true when a large car insurance deductible is involved.
When should I remove collision coverage from my auto policy?
Is it better to have comprehensive or collision?
Neither comprehensive nor collision is universally "more important"; they cover different risks, so the priority depends on your vehicle's value, your location, and your financial situation, though lenders usually require both for financed/leased cars. Collision covers accidents (hitting objects/cars), while Comprehensive covers non-collision events like theft, vandalism, animal strikes, and natural disasters. If you have a valuable car, you need both; if it's old, you might drop them if the premiums exceed the car's worth.
What is the rule of thumb for collision insurance?
One general rule of thumb is to skip collision coverage for vehicles that are more than ten years old. Your collision premiums and your deductible are more than 10 percent of your vehicle's blue book value.
When should you not use car insurance?
If the claim amount equals or is less than the deductible, there's not much sense in filing a claim. “Most car insurance policies have a deductible in place which you have to pay before their coverage kicks in,” says Ross. “If your damages are minor, you're much better off just paying out of pocket.”
How old should a car be before you drop full coverage?
Answer: The 10-year mark is a good time to reevaluate your car insurance needs, but there's more to making coverage decisions than your car's age alone. The national average cost of full coverage car insurance is $2,697 while minimum coverage averages just $820, according to Bankrate,.
Does Dave Ramsey recommend full coverage car insurance?
Dave usually recommends full coverage for car insurance, which includes both comprehensive coverage and collision coverage. These are often purchased together since they provide similar protections, but are actually distinct coverages.
Is it worth having full comprehensive car insurance?
Yes, full comprehensive car insurance is often worth it for newer, financed, or high-value cars, protecting against theft, natural disasters, vandalism, and animal hits, but may not be cost-effective for older cars where repair costs could exceed the vehicle's value, especially if you can afford to replace it yourself. The decision depends on your risk tolerance, budget, and whether your lender requires it, balancing higher premiums against the potential out-of-pocket cost of replacing a damaged or stolen car.
Which insurance is best for a 10 year old car?
The Necessity of Comprehensive Car Insurance for Older Cars
You can get covered in such scenarios by purchasing comprehensive car insurance for your old car. This cover will compensate for repairs or replacements arising from unforeseen incidents like accidents, collisions, fire, calamities, etc.
What insurance should you carry on an older car?
Regardless of your car's age, it's required to carry your state's minimum liability limits in order to legally register and drive your vehicle. Additionally, you may also be required to carry personal injury protection, as well as medical payment and uninsured motorist coverage.
When should you not have full coverage on your car?
Your car's not worth much.
The insurance company typically only pays for repairs up to the car's current market value. If your vehicle isn't worth more than a few thousand dollars, the payout you'd receive from the insurance company if you filed a claim may not be worth the cost of keeping the coverage.
At what car value should you drop full coverage?
Rule of Thumb
For example, if your older car is worth $4,000, and the annual cost for full coverage is $400 or more, dropping to liability might make financial sense.
What insurance should I get if my car is paid off?
We get it— after your car is paid off, you may want to switch to liability-only coverage in order to save on premiums. This is generally okay if your car is older and worth less than $4,000. If this isn't your scenario, we recommend against dropping comprehensive and collision.
At what point does collision insurance stop being beneficial for a customer?
Collision insurance stops being beneficial when the annual cost (premium + deductible) approaches or exceeds a significant portion (e.g., 10-20%) of your car's Actual Cash Value (ACV), especially for older cars, because the potential payout becomes minimal compared to the total out-of-pocket expense over time, meaning you're paying more for coverage than the car is worth, particularly if you can afford to self-insure repairs or replacement.
What is the 80 20 rule for insurance?
The 80/20 Rule, part of the Affordable Care Act (ACA), requires health insurers to spend at least 80% of premium dollars on medical care and quality improvement, with the remaining 20% for administrative costs (salaries, marketing, profit). For large group plans, the requirement is 85%. If insurers don't meet these Medical Loss Ratio (MLR) standards, they must issue rebates to consumers.
What type of accident will collision insurance not cover?
Collision insurance does not cover: Damage to your vehicle not related to driving (examples: hail or theft) Damage to another person's vehicle. Medical bills (yours or another person's)
Do I need collision and comprehensive on an old car?
For most drivers with an older vehicle, collision and comprehensive coverage can be considered optional. Collision pays for repairing or replacing your car no matter who is at fault. Comprehensive pays for losses not caused by collisions, such as fire, theft, vandalism, animal strikes and broken glass.
What type of insurance is best for a car?
There's no single "best" car insurance, as it depends on your needs (e.g., military, good driver, budget), but top-rated companies often cited are Travelers, USAA (for military families), Amica (customer service), and Geico (affordability/discounts). The best approach is to compare quotes from multiple insurers for your specific situation, focusing on price, coverage, discounts, and customer satisfaction.
Is it better to have a $500 deductible or $1000?
It's better to have a $1,000 deductible if you can comfortably afford the higher out-of-pocket cost because it significantly lowers your monthly insurance premiums (potentially 20-40% savings), encouraging you to use insurance for major losses, not small repairs. A $500 deductible is better if you have less savings, as it means lower costs if you file a claim, but you'll pay more in premiums. The best choice balances your budget and risk tolerance, considering your savings and car's value.