When it comes to car insurance, older cars may cost more to insure than newer models. This is because the parts needed to repair an older car may be difficult to find, and the car may not have the same security and anti-theft features as newer models. Additionally, if you have a loan or lease for your car, your lender may require you to maintain comprehensive and collision coverage. Comprehensive and collision insurance are typically cheaper for older cars, as they lose value as they age.
However, this is not the case with classic or collector cars. ValuePenguin found that the cost of car insurance for a Honda Civic would decrease by only 11% every five years of the car's lifespan. Insurance premiums are equivalent to 35% of the value of the car for drivers with clean records, but increase to 79% after an accident. If your car were wrecked and you had to file an auto insurance claim, it would still be practical to replace your car after an accident in which the culprit was responsible for the accident and you would have to rely on your comprehensive or collision coverage to reimburse you for expenses if it were a decade old or more, even considering future cost increases and deductibles.
ValuePenguin calculated that the typical cost of insurance for a midsize car increases by 93% after an accident caused by the culprit. Depreciating the value of your car over the years could mean that you're eventually shelling out more in premiums than the total replacement cost of your car. As with any car, there are several factors that affect your car insurance premiums that have nothing to do with the age of the car or the type of vehicle you drive.Instead of just covering your old car up to its amortized value, classic car insurance offers coverage up to an agreed value, which can take into account any restoration work done and the market demand for the vehicle. It's financially smart to maintain car insurance that includes comprehensive and collision coverage for vehicles that are less than a decade old.
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