Yes, you can insure an older car and even save money doing so. In fact, every U.S. state (including Illinois) requires at least basic liability insurance on any car that’s driven, regardless of age. Many owners of aging vehicles, however, adjust their coverage to avoid overpaying. For example, if your car’s value has declined significantly, you might drop costly collision coverage since any payout would be limited to the car’s low value.
On the other hand, if you own a classic car, you could opt for a special classic car insurance policy that covers an “agreed value” (a set collectible value) instead of the usual depreciated value. No matter your vehicle’s age, there are smart ways to lower your premium – from installing anti-theft devices to bundling policies – while still staying protected.
For personalized advice on insuring your older vehicle, call Insure on the Spot at 773-202-5060 for a free quote.
Do Older Vehicles Still Need Insurance?
Absolutely – older cars must be insured with at least liability coverage. Even if your car is a decade or two old, you are legally required to carry the minimum auto insurance mandated by your state.
For instance, Illinois law requires liability insurance on all motor vehicles that are driven, no matter their age or value. Liability coverage pays for others’ damages or injuries if you cause an accident, and it’s compulsory virtually everywhere. In short, you cannot skip insurance just because your car is old or fully paid off – driving without coverage can lead to license plate suspension and hefty fines.
That said, beyond liability, insuring an older car gives you some flexibility. If your vehicle is paid off and not required by a lender to have full coverage, you can choose which optional coverages to keep. Many drivers of older cars carry liability-only insurance to meet legal requirements and save money. Others keep comprehensive coverage (for theft, fire, etc.) but drop collision coverage if the car’s value is very low.
The key is to balance the cost of insurance against the car’s value and your risk tolerance.
Is Full Coverage Worth It on a 10-Year-Old Car?
“Full coverage” (collision + comprehensive) on an older car might not be cost-effective if the car’s market value is low. As cars age, they depreciate in value, and any collision or comprehensive claim payout is capped at the vehicle’s actual cash value (ACV) at the time of loss. For example, imagine a 15-year-old car worth only about $2,000; if it’s badly damaged in an accident, the insurer would pay at most $2,000, even if repairs cost much more.
In such cases, paying extra each month for collision coverage can become a poor deal financially.
A common rule of thumb from industry experts is: if your car is worth less than ~10 times the annual premium for collision and comprehensive, those coverages may not be worth keeping. In other words, if you’re paying, say, $300 per year for full coverage on a car worth only $2,000–$3,000, it’s probably time to consider dropping collision and comprehensive.
You would be spending a significant fraction of the car’s value on insurance, and any claim payout would be small. By dropping those coverages (and carrying liability-only insurance), you could save money for a future vehicle upgrade or repairs.
However, consider your personal risk tolerance and financial situation before canceling full coverage. If you cannot easily afford to repair or replace your car out-of-pocket after an accident, you might choose to keep collision coverage a bit longer, even on a 10+ year-old car.
A good middle-ground is to raise your deductible on collision/comprehensive, which lowers your premium while still providing some protection. For instance, increasing a $250 deductible to $500 or $1,000 can significantly cut costs – just be sure you have enough savings to cover that higher deductible if you file a claim.
Finally, note that if your older car is financed or leased, your lender will typically require you to maintain full coverage (collision and comprehensive) until the loan is paid off. Once you own the car outright, you have the freedom to reduce coverage. In summary, full coverage on a 10-year-old (or older) car is often optional and should be evaluated based on the car’s value, your budget, and whether you can handle the risk of paying for damage yourself.
Comparison: When to Keep vs. Drop Optional Coverages
To help decide, consider the following scenarios for vehicle age/value and insurance approach:
| Vehicle Situation | Example Value | Suggested Insurance Approach |
| Newer or high-value car (few years old, or still worth a lot) | e.g. $20,000 | Keep full coverage. You have a significant asset to protect, so maintaining collision and comprehensive (in addition to liability) is worthwhile. |
| Around 10-year-old car, moderate value (paid off) | e.g. $5,000 | Case-by-case. Consider raising deductibles or even dropping collision/comprehensive if premiums are high relative to value. Ensure you keep liability coverage, and be prepared to pay out-of-pocket for your own damages if you drop physical damage coverage. |
| Old car (15+ years), low market value | e.g. $2,000 | Liability-only may suffice. If the cost of full coverage approaches the car’s worth, it’s often not cost-effective. You might drop collision/comprehensive and save money, accepting that any major damage would likely “total” the car. |
| Classic/Collectible car (limited-use, 20–30+ years old) | Value varies (often higher due to collectibility) | Classic car policy. If the vehicle has collectible value, consider classic car insurance with agreed value coverage to fully protect its worth. This specialized coverage ensures you’d get the agreed-upon amount if the car is totaled, rather than a low depreciated value. |
Are Older Cars Cheaper to Insure than Newer Cars?
Often yes – older cars generally cost less to insure than brand-new cars, mainly because they’re worth less and cheaper to repair or replace. As a car ages and its value drops, the maximum payout an insurer would make on that car also drops, which in turn can lower your premiums. For example, full coverage insurance for a 10-year-old vehicle can be around 25–30% cheaper than for its brand-new equivalent model, according to industry data.
A recent analysis found that owners of popular 2013 models paid roughly $1,000 less per year for insurance compared to owners of the 2023 versions of those cars.
Simply put, a $2,000 older sedan is less expensive to insure than a $25,000 new sedan because the insurer’s risk (in terms of potential payout) is much lower.
However, older cars are not always cheaper to insure – there are some hidden factors that can keep rates up. Insurance pricing depends on more than just car value. Here are a few reasons an aging car might cost more (or not much less) to insure than you’d expect:
- Expensive or hard-to-find parts: As cars age, parts can become rare or expensive to source. If your older model requires pricey, specialized parts for repairs, an accident could actually cost the insurer more than a newer car.
- Lack of modern safety features: Newer cars come standard with advanced safety technology, which can lead to discounts. Older vehicles often lack these features, making them riskier to drive and potentially disqualifying you from some discounts.
- Higher theft risk: Older cars are often easier to steal due to lack of modern anti-theft systems. If your older car has a higher theft rate, insurers may charge more for comprehensive coverage.
In summary, aging vehicles usually see insurance costs go down, but not always in a straight line. The drop in value helps lower premiums, yet older cars might miss out on safety and anti-theft discounts, and could incur higher repair costs in a claim.
What Is Classic Car Insurance, and Is Your Car Eligible?
If you own a classic, antique, or collectible vehicle, classic car insurance is a special type of policy designed for older vehicles that are maintained for show or hobby, rather than everyday driving. These policies differ from regular car insurance in a few key ways:
1. Agreed Value Coverage
Classic car insurance offers agreed value coverage – you and the insurer agree on the vehicle’s value, and that’s the amount you’ll receive if the car is totaled. This ensures you aren’t shortchanged by depreciation, which is often an issue with regular auto policies.
2. Special Coverages
These policies may include coverage for spare parts, coverage for car show events, or the option to suspend certain coverages when the vehicle is in storage.
3. Eligibility Criteria
To qualify for classic car insurance, your car generally needs to meet certain criteria:
- Vehicle age (usually 20-25 years old, though exceptions may apply for rare or collectible models).
- Limited use – it must not be a daily driver.
- Secure storage – the car should be kept in a locked garage or similar safe place.
How Can You Save Money on Insurance for an Older Vehicle?
One advantage of insuring an older car is the potential to cut down your insurance costs. Here are several tips to reduce premiums for your aging vehicle:
- Drop Unnecessary Coverages – Consider dropping collision and comprehensive coverage if your car’s value no longer justifies the cost.
- Raise Your Deductibles – Choosing a higher deductible can lower your premium. Just be sure you can afford the higher deductible if a claim arises.
- Bundling and Multi-Policy Discounts – Bundle your auto policy with home or other insurance for discounts.
- Low-Mileage Usage – Ask about low-mileage discounts or usage-based insurance.
- Maintain a Clean Driving Record – Your personal driving history still heavily influences your rate, no matter the car’s age.
- Vehicle Safety and Anti-Theft Improvements – Even if your car is from another era, there are steps you can take to make it safer or less likely to be stolen.
Frequently Asked Questions (FAQs)
Q: What is the difference between standard car insurance and classic car insurance?
A: Classic car insurance covers a vehicle for its agreed value, while standard auto insurance pays for actual cash value, considering depreciation. Classic policies also have special requirements for limited use, storage, and usually offer better protection for collectible vehicles.
Q: Is full coverage worth it on a 10-year-old car?
A: It depends on the car’s value. If your car is worth less than 10 times the annual premium for full coverage, it might not be worth keeping. You could consider liability-only insurance or raising your deductibles for savings.
Q: How can I save money on insuring an older car?
A: You can save by dropping unnecessary coverages, raising your deductibles, bundling insurance policies, driving less, and taking advantage of available discounts.
Q: Are older cars always cheaper to insure than new cars?
A: Not always. While the value of an older car generally lowers premiums, factors like expensive parts, lack of safety features, and higher theft risks may raise costs.
Q: What happens if my older car is totaled in an accident?
A: If your older car is totaled (meaning repair costs would exceed its value), your insurer will pay you the vehicle’s actual cash value just before the accident, minus any deductible. Because older cars have lower values, even moderate damage can lead to a total loss.
Q: Can I get classic car insurance for a vehicle I drive occasionally (but not daily)?
A: Yes, if the vehicle meets the classic insurer’s criteria. Classic car insurance isn’t strictly about age – it’s about how the car is used and its collectible status. If you have a weekend cruiser or a show car that’s not your primary transportation, and it’s usually over 20-25 years old, it could qualify for a classic policy.
Q: Do older cars need an emissions test or special inspection to get insured?
A: Generally, insurance companies do not require emissions tests or special inspections for older cars as a condition of insuring them. However, classic car insurers may request an inspection to verify the car’s condition and value.
Get Help Insuring Your Older Vehicle
For more personalized tips on insuring your older vehicle or classic car, call Insure on the Spot at 773-202-5060 for a free, no-obligation quote. We’re here to help you save money while keeping your car protected.