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Insurance Insights: Aging Vehicles

How does the age of your vehicle affect insurance?

New and used vehicle prices reached new heights this past year, causing many folks to keep their current cars and trucks longer. If you are driving an aging car, remember that proper maintenance isn’t the only important upkeep — you also need to adjust your insurance coverage over time. Keep the following insurance considerations in mind.

michael riley
Michael Riley, Director of Sales, AAA Washington Insurance Agency

Making the final payment of a lengthy auto loan feels great, but it’s also an ideal time to review your insurance coverage. The coverage required by your former lender may be excessive considering the actual value of your now older vehicle. Your agent may be able to adjust the coverage to provide a better balance of protection and value. When you formally transfer the title into your name, use that event as a reminder to schedule a review. 

As your vehicle’s value declines over time, so does the maximum dollar amount of damage that a crash can cause before it’s considered a total loss. Accordingly, reducing collision and comprehensive coverage is one of the smartest ways to save money on insurance for an older vehicle. Eventually, it may make financial sense to eliminate these coverages entirely. Your agent can help you decide when and how to strategically reduce your coverage. 

Keep in mind, however, that without comprehensive and collision coverage, you’ll have to pay out of pocket for damages to your vehicle if you get into a crash. Although this might sound scary, frequency of claims is one of the primary drivers of significant rate increases, so paying for small repairs on your own is almost always a smart move — even if you still have comprehensive and collision. You might consider putting aside the money you save on premiums for an “emergency repairs” fund for your older vehicle. 

As you and your agent identify ways to save on your older vehicle’s insurance, also consider redirecting some of that money into your policy. For example, the need for strong liability and uninsured motorist insurance never diminishes, because the cost of injuries and litigation are independent of vehicle value — and are always rising.

Beefing up these coverages can give you peace of mind. In addition, check for valuable coverage you may have previously declined, such as auto glass and rental reimbursement, both of which can be handy additions. 

If you’re driving an older vehicle in this new year, make it your resolution to get in touch with a AAA insurance agent and see how you might be able to save — or at least get better coverage at a better value. We’re here to help.

–Written by Michael Riley, Director of Sales of AAA Washington Insurance Agency, has more than 25 years of experience in the insurance industry and is a guest lecturer at Washington State University.

Interested in planning your next road trip with AAA Washington? Call your travel agent directly or your nearest AAA store to get pro tips, TripTik maps, and more. Find more Pacific Northwest scenic drives and road trips.

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