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Car Insurance for Used Cars

Written by Elizabeth Rivelli

Reviewed by Rob Deming

Last updated: May 30, 2023

Purchasing a used car is a fantastic option for many drivers. It’s usually more affordable than buying a brand-new car, and you won’t deal with the significant depreciation that occurs during the initial years of a new car’s life. 

But even though used cars have a lower value than new cars, it’s still important to have enough car insurance coverage. Car insurance protects your liabilities and your vehicle, and it’s legally required in most states, regardless of the age or mileage of your car. 

In this article, we’ll explain what types of car insurance you might need for a used car, as well as the cost of used car insurance and how to save money on your insurance policy. 

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What does it cost to insure my used car?

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How much does car insurance cost for a used car?

Your individual driver profile can also impact the premium. When you apply for car insurance, the insurance company will look at your age, location, credit score, claim history, driving record, and more. 

In general, younger drivers usually pay higher insurance rates due to their lack of experience, and people with a history of accidents or traffic violations may also be hit with more expensive premiums. If you have bad credit, you can also usually expect to pay a higher rate for coverage. 

If you fall into any of these riskier categories, a used vehicle may be an excellent choice, since insurance on used vehicles is generally cheaper than new – but expect to still pay higher rates than people with clean driving records and excellent credit. 

Another factor that can affect the cost of used car insurance is the type of coverage you purchase. While most states require drivers to carry liability insurance, you may also choose to add collision insurance, comprehensive insurance, and other optional coverages, which can increase the premium.  

However, depending on the age and value of your used vehicle, it might not make sense to have all the additional coverage. When deciding what coverage you need, a general rule of thumb is if you can afford to pay for damages to your own property out-of-pocket, it might not make sense to add collision or comprehensive insurance. 

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Are used cars cheaper or more expensive to insure?

When it comes to car insurance, used cars are usually cheaper to insure than new cars. This is because used cars hold less value and are therefore cheaper to replace or repair in the event you need to make a claim. 

However, this isn’t always the case. The cost of insuring a used car can vary greatly based on your car’s specific year, make, and model. For example, a used high-performance sports car may be more expensive to insure than a brand-new sedan or hatchback. 

Personal factors will also impact the price you pay for car insurance. Your age, location, driving record and credit may make your insurance more or less expensive.  

Why are used cars cheaper to insure?

Used cars are typically cheaper to insure because they have less value than new cars. On average, a new vehicle loses about 50% of its value after just five years. That means a brand-new car that costs $40,000 could be worth just $20,000 after five years of ownership. 

When calculating premiums, insurance companies take the potential cost of repairing or replacing a vehicle into account. Since the value of a used car is often less than that of a new car, the cost of replacing or repairing a used car is lower, which makes them cheaper to insure. 

What is the cheapest used car to insure?

The cheapest used car to insure depends on a variety of factors specific to each vehicle and owner. If you’re looking for a cheap used car to insure, though, look for an older used car with less value than newer used cars. For example, a 2005 Toyota Camry will likely have a lower insurance premium than a 2015 Toyota Camry that has newer features and a higher value. 

How much should I expect to pay to insure my used car

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How to get cheap car insurance for your used car

Even though used cars are usually less expensive to insure, it doesn’t mean you will pay a cheap premium. There are several ways to lower your car insurance rate while still maintaining sufficient coverage.  

Here are some tips for getting cheaper car insurance: 

  • Look for insurance companies that offer discounts: Some companies offer discounts for things like being a safe driver, getting good grades in school, or having safety features installed in your car, like an anti-theft device. 
  • Improve your credit score: Many insurance companies use your credit score as a factor in determining your premium, so improving your score can help you get cheaper rates. 
  • Pick higher deductibles: Choosing a higher deductible can lower your premium. However, it also means that you’ll pay more out of pocket if you get into an accident or have to file a claim. 
  • Bundle your auto and home insurance: Many insurance companies offer discounts if you bundle your auto and home insurance policies with the same insurer. 

Before you purchase a used car insurance policy, it’s also a good idea to compare quotes from multiple insurance companies. Getting quotes from a few insurance providers can help you find the best rate for your coverage needs. 

Take our short quiz to see how much you can expect to pay to insure your used car. 

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Frequently asked

Can you get gap insurance on a used car?

In many cases, you can get gap insurance for a used car. However, most insurers have limits for who they will offer gap insurance to. Nationwide, for example, only offers gap insurance in certain states and for cars that are less than six years old. Progressive, on the other hand, offers lease/loan payoffs (their version of gap insurance) for no more than 25% of a vehicle’s value. Other insurance companies require your car to be less than three years old. 

Do I need insurance before I buy a used car?

Before you buy a used car, you must have car insurance on the vehicle. You will need insurance to legally drive your car home from the dealership, whether it’s used or financed. Most dealers will ask to see proof of insurance before they complete the sales transaction. 

How to get insurance before buying a used car?

Because you need car insurance when buying a used car, be prepared before you make your purchase. Start by researching different insurance companies to compare rates and coverage options, and then get a few quotes for the car you’re interested in buying. To get a quote, you will need some details, like the car’s VIN, mileage, year, and safety features. 

Once you’re at the dealership, call the insurance company or go online to complete the purchase process. You can usually download an electronic copy of your proof of car insurance to show the salesperson. 

Is collision insurance worth it for old cars?

Collision insurance isn’t always worth it if you drive a much older car. You will need to consider several factors, including the value of the vehicle and the cost of your collision premium. In general, collision insurance may not be worth it if the cost of your annual premium and deductible is greater than the fair market value of your vehicle.