Buying Insurance For a Used Car

When looking to insure a used car, there are a variety of factors to consider. One of the more important factors how much insurance is needed for a used car. When it comes to liability coverage, you are required to have the minimum liability limit as set by your state government. Keep in mind, this amount is very small in most states and will likely not be sufficient to cover you in the event of an accident. Remember the more liability insurance you have the better.

Physical Damage Coverage : Comprehensive and Collision

When considering to add physical damage coverage, such as comprehensive or collision coverage, it is important to look at the age, make, condition and model of your vehicle. If your vehicle is brand new you will certainly want to have physical damage coverage, if however, you are have a older model used car than having physical damage coverage may not be worth the extra expense. Also some insurance companies will not allow this coverage on cars that are older that are very old, usually over twenty years old.

Used Cars Value Less than $2000

If your used or older car is worth less than $2000 than liability insurance alone should be sufficient. That way, you are not paying for the extra premiums that come with the physical damage coverage or the deductible, which would be half or equal to your cars total value.

Consider Depreciation
When you insure a used car you have to keep in mind that the car is going to be worth less and less every year. So if you do get into an accident and your vehicle is a total loss, meaning that it’s gone to car heaven, you are going to be paid only what the actual cash value of your vehicle is at the time of accident. For example, if the car that you are driving is only worth $5,000 today and you paid $25,000 for it back in 1996, you’re only going to get $5,000. By the way, your insurance company determines how much they are going to pay you based off the value stated in Kelly’s Blue Book.