Older cars usually cost less to insure than newer ones, but the savings depend on the car's value, your coverage choices, and what happened to it before you bought it
Insurance companies charge based on how much it would cost them to replace or repair your car. A ten-year-old Honda Civic is worth less than a brand-new one, so collision and comprehensive coverage — the parts that pay for damage to your own vehicle — cost less. But liability coverage, which pays for damage you cause to someone else's car or property, does not drop much with age. If you own an older car outright and drop collision coverage entirely, your bill falls sharply. If you still owe money on an older car, your lender requires full coverage, and your savings shrink.
The real cost difference shows up when you compare two scenarios: insuring a five-year-old paid-off sedan versus a brand-new one with a loan. The older car's collision and comprehensive premiums might be half the new car's. But if you compare a twenty-year-old car with unknown repair history to a five-year-old one with full service records, the older car may actually cost more because insurers see it as a higher risk for breakdowns and accidents.
Key Takeaways
- Collision and comprehensive coverage — which protect your car — drop in price as the car ages and loses value, sometimes by 40 to 60 percent over ten years.
- Liability coverage, which protects the other driver, stays roughly the same regardless of your car's age because it is based on your driving record and location, not your car's value.
- Dropping collision coverage on a paid-off older car cuts your premium significantly, but lenders require full coverage if you still owe money.
- A very old car with poor maintenance records or multiple accidents may cost more to insure than a newer used car because insurers see it as higher risk.
- The year of the car matters less than its safety features, repair costs, and theft rates — a 2015 model with expensive parts may cost more to insure than a 2010 model with cheap ones.
How car age affects collision and comprehensive premiums
Collision coverage pays to fix your car if you hit something or someone hits you. Comprehensive coverage pays for theft, weather, vandalism, and hitting an animal. Both are optional if you own the car outright, and both cost less for older cars because the payout is capped at the car's current market value. A $500 repair on a car worth $8,000 is a bigger percentage loss than the same repair on a car worth $35,000, so insurers charge less for the older car.
The drop is not linear. A three-year-old car might cost 20 percent less to insure than a brand-new one. A ten-year-old car might cost 50 percent less. A twenty-year-old car might cost 60 percent less. But these numbers vary by make and model — a 2004 Toyota Camry depreciates differently than a 2004 Porsche 911. Your insurer has a database of what each model year is worth in your area, and they use that to set your collision and comprehensive rates.
Why liability coverage does not drop much with age
Liability coverage pays for injuries and property damage you cause to other people. It has nothing to do with your car's value — it covers the other driver's car, their medical bills, or a fence you hit. Whether you drive a 2024 Lexus or a 2004 Corolla, you can cause the same amount of damage. Your liability rate depends on your driving record, your age, your location, and the coverage limits you choose, not on what your car is worth.
This is why the total savings on an older car are smaller than many people expect. If your full premium is $1,200 a year and $400 of that is liability, dropping to an older car might cut your collision and comprehensive costs from $800 to $400 — a $400 annual savings. But your liability portion stays at $400. Your new total is $800, not $400.
When dropping collision coverage makes sense
If you own an older car outright — meaning you do not owe money on it — you can drop collision and comprehensive coverage. This is a choice, not a requirement. Dropping collision saves money when ready, but it means you pay out of pocket for any damage to your own car. If you hit a telephone pole, your insurer pays nothing. You pay for repairs or a replacement car yourself.
The math works differently depending on your car's value and your financial cushion. If your car is worth $5,000 and you have $10,000 in savings, dropping collision might make sense — you can afford to replace it if something happens. If your car is worth $15,000 and you have $2,000 in savings, keeping collision coverage protects you from a financial crisis. Some people use a rule of thumb: if your car is worth less than ten times your collision deductible, dropping coverage is worth considering. If your deductible is $500 and your car is worth $4,000, that rule suggests dropping it. If your car is worth $8,000, it suggests keeping it.
When an older car costs more to insure
An older car with a poor history can cost more to insure than a newer used car. If the car has been in multiple accidents, has frame damage, or has a salvage title (meaning an insurer once declared it a total loss), insurers charge more for collision coverage because they see it as higher risk. A 2008 car with a clean title and full service records may cost less to insure than a 2015 car with three accidents on its record.
Repair costs also matter. A 2010 Honda Civic is cheap to repair, so collision coverage is inexpensive. A 2010 BMW or Audi may have expensive parts and specialized labor, so collision coverage costs more even though the car is the same age. Theft rates matter too — if your model year is frequently stolen in your area, comprehensive coverage costs more regardless of age.
Safety features and technology that affect rates
Newer cars have safety features that older cars do not: automatic emergency braking, lane-keeping information, backup cameras, and stability control. Some insurers offer discounts for these features because they reduce accident risk. An older car without them may cost more to insure per dollar of value than a newer car with them, even if the older car is worth less overall.
Conversely, older cars sometimes have lower theft rates because they lack the electronics that thieves target. A 2005 truck might have a lower comprehensive rate than a 2015 truck of the same model because older trucks are easier to steal but less valuable to thieves. Your insurer's data on your specific model year and trim level determines this, not a general rule about age.
What to do if you are considering an older car
Before you buy an older car, ask your insurer for a quote on it. Do not assume it will be cheaper — get actual numbers. Provide the year, make, model, trim level, and whether you plan to pay cash or finance it. If you are financing, your lender will require collision and comprehensive coverage, which changes the calculation. If you are paying cash, you can choose to drop those coverages and see how much you save.
Check the car's history report through Carfax or AutoCheck before you buy. A car with frame damage, multiple accidents, or a salvage title will cost more to insure. Ask the seller for maintenance records — a well-maintained older car is a better insurance bet than a neglected one. Once you own it, keep records of all repairs and maintenance, because this history can lower your rates if you ever switch insurers.
Frequently Asked Questions
Is a ten-year-old car always cheaper to insure than a five-year-old car?
Not always. A ten-year-old car with a salvage title or multiple accidents may cost more than a five-year-old car with a clean history. Repair costs and theft rates also matter — a ten-year-old luxury car can cost more to insure than a five-year-old economy car. Get quotes on both before you decide.
Can I save money by dropping collision coverage on my older car?
Yes, if you own it outright. Dropping collision saves money when ready, but you pay for repairs yourself if your car is damaged. If your lender requires full coverage because you still owe money, you cannot drop it.
Do older cars get discounts for safety features?
Older cars rarely have the safety features that may have access to for discounts — automatic emergency braking, lane-keeping information, and backup cameras are mostly on newer models. Some older cars have lower theft rates, which can lower comprehensive premiums, but this varies by model and location.
What is the oldest car I should buy if I want cheap insurance?
There is no specific age cutoff. A well-maintained 2010 model with a clean history may cost less to insure than a neglected 2015 model. Check the car's history report and get insurance quotes before you buy, regardless of age.
Does my driving record affect how much I save on an older car?
Yes. Liability coverage, which does not drop with age, is based on your driving record. If you have accidents or tickets, your liability rate is high regardless of whether you drive a new or old car. Collision and comprehensive savings explore to everyone equally, but your total savings depend on how much of your premium is liability versus collision.