When to Drop Collision Coverage?
- Thread starter khang.mis
- Start date
There is not a formula really. It goes by how old your vehicle is and what the actual cash value is and what your willing to pay. If you still have a loan on the vehicle then you need collision.
When I sold insurance I would say when a car gets between 5 to 10 years old then start researching what the car is worth. If you have high mileage, the car is probably not worth much anymore and it may not be cost effective for you to pay for collision coverage. If you have the financial means to keep collision on the vehicle even if it is old then keep it.
When I sold insurance I would say when a car gets between 5 to 10 years old then start researching what the car is worth. If you have high mileage, the car is probably not worth much anymore and it may not be cost effective for you to pay for collision coverage. If you have the financial means to keep collision on the vehicle even if it is old then keep it.
I'll tell you when NOT to drop collision coverage, one day before you son wrecks your old sports car....
crandall1986
New Member
- 1
I have a specific situation that I would like some opinions on: I recently bought a car for 6k that my girlfriend and I will share. We live in a city and she drives it out of the city to work M-F. I financed it out of convenience. However, she is a new driver (27 y/o, but always lived in cities). Because of this, collision alone on the car is around 1.5k and comp is another 200 per year. The financing obviously requires comp and collision, but I could pay the car off and get rid of it or raise the deductible (currently 500). I figure that will save us the value of the car over the four years it was financed anyways.
Thoughts? I appreciate it!
Thoughts? I appreciate it!
- 134
$1500/yr sounds extremely out of line for collision on a $6000 vehicle. I would definitely pay off the loan and drop the collision. (Or shop for a new carrier!) Unless of course, you have ridden with her and know she is prone to an accident.
If your girlfriend is a new driver, I would keep the collision coverage, at least for the first 6 months or so. After that, you can pay off the car and drop it if you want.
Remember, it doesn't save you much dropping it if you (or your girlfriend) has an accident.
Shopping your policy may be a good idea, but so many factors play into the rates, its hard to know if this is high, average, or a good deal.
Dan
Remember, it doesn't save you much dropping it if you (or your girlfriend) has an accident.
Shopping your policy may be a good idea, but so many factors play into the rates, its hard to know if this is high, average, or a good deal.
Dan
- 736
I think it would come down to, if you remove full coverage and the car went out of commission, what would you do?
- 232
My advice is to keep collision unless/until you can afford to replace the car in the event it gets totaled, or if you have alternate transportation readily available.
Our shop sees at least 1 car a week that's wrecked beyond drivability without any collision coverage, and a sobbing owner trying to figure out how to get to work tomorrow.....and how to get their car off my lot before I start charging storage fees.
Our shop sees at least 1 car a week that's wrecked beyond drivability without any collision coverage, and a sobbing owner trying to figure out how to get to work tomorrow.....and how to get their car off my lot before I start charging storage fees.
- Thread starter
- #9
Thanks for that perspective, that sounds most reasonable
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