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It is time for me to renew my auto insurance on my 8 year car. Someone told me that I am throwing my money away by paying for collision insurance at this point.

Should I drop it? Am I wasting my money? What do you think?

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That's the age where it becomes a very tough decision..I've often increased my deductibles to max by that point..do it it you already haven't. If you have fundage/savings for minor emergencies, it may pay to 'insure yourself' damage-wise from now on on that vehicle. G'Luck!

What is the value of your car? 8 year old luxury car, maybe 8 year old cheapo kia rio, probably not...

wiredspider said: What is the value of your car? 8 year old luxury car, maybe 8 year old cheapo kia rio, probably not...

Exactly.

imsachin said: wiredspider said: What is the value of your car? 8 year old luxury car, maybe 8 year old cheapo kia rio, probably not...

Exactly.


These two beat me to it.

WLABOB said: It is time for me to renew my auto insurance on my 8 year car. Someone told me that I am throwing my money away by paying for collision insurance at this point.

Should I drop it? Am I wasting my money? What do you think?


Conventional wisdom says drop it...but I think it's more dependent on the value of the car AND what rates you're paying for insurance.

Ex, my low-mileage Camry is still worth $6K+ at that age...and $500 deductible collision only adds $152/yr (in DC, no less)...so I consider it well worth the expense.

(If you've got something like a high mileage Kia + a couple of tickets jacking up your rates, there could be a totally different answer based on insurance cost vs car value.)

imsachin said: wiredspider said: What is the value of your car? 8 year old luxury car, maybe 8 year old cheapo kia rio, probably not...

Exactly.

Not quite so. It depends on if one can easily absorb the loss, regardless it being a BMW or Kia--extreme example, Bill Gates doesn't need to insure any cars for collision.

It also depends on whether or not you are still paying on the vehicle. Most lenders require you to have insurance on a vehicle that you are still paying on.

After 8 years, one would hope not to still be paying for a vehicle, but with the price of cars continually going up, 8-year financing is not so out of the realm of future reality.

I dropped my collision when the insurance company told me that I'd only Get $700 ($1200 assesed value minus $500 deductable) if I totaled my vintage Escort, and I was paying something like $325/yer just for collision.

nycll said: imsachin said: wiredspider said: What is the value of your car? 8 year old luxury car, maybe 8 year old cheapo kia rio, probably not...

Exactly.

Not quite so. It depends on if one can easily absorb the loss, regardless it being a BMW or Kia--extreme example, Bill Gates doesn't need to insure any cars for collision.


True

So what the OP needs to do is find out the value of the car, call his insurance and find out what it would be if he dropped collision or just look on his bill to see what he is paying for collision, then determine if it's worth it to him.

... taking into account whether they can absorb the expense if that happens.

I have a 97 corolla that runs perfect which I drive when my wife lets me. Its her baby. We have collision coverage. Last spring a guy rear ended the car & then drove off . I chased him & was only able to get his licence no. & type vehicle before he got away. I contacted the police, & they took the report & filed it. Although there were lots of ways to track down the hit & run guy , the cops said that as long as he got away & I could not identify the driver, only the vehicle, I was sol. Fortunately the insurance covered the damage. & the car still runs like a clock. Lesson I learned, for $few bucks/ yr for collision & fact that the cops will not be of help , If you like the car , keep up the collision. I would be much more angry with the way things went if it was not fot the insurance. I just wonder why the cops could not do anything when I gave them the licence no. OD the hit & run.

murphywasright said: If you like the car , keep up the collision.

Excellent point. Just because the market value of your car is say, only $3-5K, doesn't mean anything if you know it will go for another 5-7 years no problem. The extra years of use is worth far more than the market value can ever show. Personally, I'd prob drop COLL + COMP coverage once I know I'll be replacing the car in a few years anyway.

My car is 9 years old and the Blue Book value is about $2,300. I plan to keep it for another couple of years and currently it has around 80,000 miles on it. Right now, I am paying around $450 a year for collision with a $500.00 deductible.

Based on what I am reading, maybe, I should hold onto the collision for a while longer. However, I am still on the fence about this. On one hand, I can really find a better use for the money, but...

Does my logic make any sense?

My car is 8 years old and the Blue Book value is about $2,300. I plan to keep it for another couple of years and currently it has around 80,000 miles on it. Right now, I am paying around $450 a year for collision with a $500.00 deductible.

Based on what I am reading, maybe, I should hold onto the collision for a while longer. However, I am still on the fence about this. On one hand, I can really find a better use for the money, but...

Does my logic make any sense?

WLABOB said: My car is 9 years old and the Blue Book value is about $2,300. I plan to keep it for another couple of years and currently it has around 80,000 miles on it. Right now, I am paying around $450 a year for collision with a $500.00 deductible.

Based on what I am reading, maybe, I should hold onto the collision for a while longer. However, I am still on the fence about this. On one hand, I can really find a better use for the money, but...

Does my logic make any sense?
A $500 deductible is too low. See how much you'd save with a $1000 ded., and if the premium doesn't drop too much you'd probably be better off just dropping collision.

I can see some other posters' points about keeping collision if you rely on the car and it's still running pretty well, it can be a hassle to have to buy a new car...but if the car is totaled you would need to get a new car anyway. Your max benefit would be $1800 (plus an increase in premiums), or 4 years worth of premiums. Not to mention that the BB value will continue to drop over time.

WLABOB said: My car is 9 years old and the Blue Book value is about $2,300. I plan to keep it for another couple of years and currently it has around 80,000 miles on it. Right now, I am paying around $450 a year for collision with a $500.00 deductible.

Based on what I am reading, maybe, I should hold onto the collision for a while longer. However, I am still on the fence about this. On one hand, I can really find a better use for the money, but...

Does my logic make any sense?


You'd end up getting $1800 if you totaled the car. Is saving ~$250 worth the risk. Due to high insurance rates, I've always dropped full coverage once the car was worth less than $5k. But thats me.

WLABOB said: My car is 8 years old and the Blue Book value is about $2,300. I plan to keep it for another couple of years and currently it has around 80,000 miles on it. Right now, I am paying around $450 a year for collision with a $500.00 deductible.

Based on what I am reading, maybe, I should hold onto the collision for a while longer. However, I am still on the fence about this. On one hand, I can really find a better use for the money, but...

Does my logic make any sense?


Everyone has their own way of looking at things but paying $450 a year to maybe get back $1800 seems like a poor financial choice. Also seems like really expensive insurance, have you shopped around? My insurance for collision is slightly less than that and my car is worth about $15,000.

You'd have to get in an accident and total the car every four years to make the insurance worth it and that would only be break even.



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