Purchasing a used car is a very good way to save money. However, those savings can dry up instantly if you are involved in an accident without the perfect used car insurance.
Just so you know, used car insurance is not a specific type of policy that insurers provide. It is actually just the same as the new auto insurance.
However, the cost of insuring an already-used vehicle is totally different from the cost of insuring a new one. And the type of coverage you need may change.
To avoid buying unnecessary insurance or being underinsured, it is a good idea to know how used car insurance works, the type of coverage involved, and how much it costs.
What is Used Car Insurance?
Used car insurance is a contract between you and an auto insurer that outlines coverage for a vehicle that isn’t new. The policy will indicate when you will get financial compensation when you file a claim.
If you don’t pay the auto insurance bill, coverage lapses, and any claims made during the unpaid period will be denied. The perfect car insurance for a used vehicle will combine the right coverage that fits your needs at an affordable price.
How Much is Auto Insurance for a Used Car?
When it comes to used cars, insurance is usually cheaper, especially when comparing policies that have comprehensive and collision coverage.
Since these types of coverage pay for the damage to your vehicle up to the current market value, insuring a used vehicle will be cheaper. And the reason is that the vehicle value has depreciated over time, so it would not be expensive to replace or repair.
However, in rare cases, certain parts of older car models can become very difficult to find. And this may raise the cost of repairs, and the lack of safety equipment in older cars can make the cost of insuring the vehicle go up.
Apart from the age of your car, insurers consider many factors to set the premium for your policy. These factors include your driving history, your state of residence and address, age, gender, type of coverage, liability limit, deductible, type of car, and your credit score.
Although comprehensive and collision insurance may be very cheap for this kind of vehicle, you may not need to add them to your policy. This depends on the current value and age of your vehicle.
What Are the Types of Used Car Insurance Coverage?
Although the best auto insurance for a used vehicle depends on your budget and needs, you will need the minimum car insurance requirement in your state to drive legally. There are extra coverage types available that offer financial protection if your vehicle is damaged, stolen, or totaled.
- Collision Coverage: This helps to cover the cost of replacing or fixing your vehicle if you are in an accident, regardless of whose fault it is.
- Liability Coverage: Most states require drivers to purchase liability insurance at least. It helps to pay for damages you cause to other people and their properties if you cause an accident.
- Comprehensive insurance: This pays for damages and theft to your vehicle that are related to accidents, such as weather damage, fire, vandalism, and weather damage. If you live in a high-risk area for these incidents, this may be a good option for you. It is also typically required if you finance your vehicle.
- Uninsured motorist coverage: This helps to pay for injuries caused by a driver who does not have insurance for you and your passengers. It is required in a few states.
- Personal injury protection: This coverage covers lost wages and medical expenses if you or your passengers get injured in an accident, regardless of who is at fault. Personal injury protection is optional in some states and mandatory in others.
- Roadside assistance insurance may be a good choice if you are worried about breaking down and being stranded on the roadside.
- Rental reimbursement: If your vehicle is in the repair shop because of an accident covered by your policy, this coverage will help pay for a rental car.
Discuss with your insurance provider or agent to determine the perfect car insurance coverage for your used vehicle.
Do I Need Full coverage Insurance for Used Car?
Full coverage car insurance contains liability, collision, and comprehensive insurance and offers extensive protection for your vehicle.
If you finance or lease your car, you will be required to purchase full coverage. Or else, for a used vehicle, deciding on full coverage depends on the car’s value and your financial situation.
Full coverage might be a good choice for you if your used vehicle is valuable. It will help cover accidents, theft, and non-crash damage like fire, hail, or flooding.
You can check the value of your car on websites like Edmunds. Consider your current finances too. If repairing or replacing your car after an accident or damage would be a financial strain, full coverage is a smart choice.
You can easily compare quotes from affordable full coverage providers online. If your car isn’t worth that much, full coverage may not be cost-effective or a good choice.
Liability-only insurance might be a better option since the maximum payout for comprehensive and collision insurance is your car’s pre-damage value minus the deductible. If your vehicle is a low-value car, the insurance payout would be minimal.
How Do I Get Auto Insurance When Purchasing a Used Car?
Some insurers’ websites offer quotes, and you can also meet with an independent insurance agent who can offer quotes from multiple insurers.
Compare the quotes for the vehicles you want to buy before the deal gets closed. If you want to add the car to your household, contact your carrier to arrange coverage before purchasing the car.
To get very cheap rates and prices on this type of vehicle, you need to consider what type of coverage you need. Increase your deductible, look for discounts, and check out special insurance if you have an antique or classic vehicle.
Also, ensure you compare quotes to find the most affordable coverage that suits you and your needs.
