Should You Drop Collision Coverage on An Old Car That You Still Use?
The short answer is No, don’t drop collision coverage if you will struggle to buy a new or even a used car after a crash. A lot of people, me included, drop collision coverage on older cars. Collision requires the insurer to repair your vehicle, no matter how old, unless the cost of repairs is larger than the book value of the car. But, if you are going to have financial problems that don’t allow you to quickly replace your damaged older car, then you should keep collision on your car. For example, let’s say your teen is driving a 2000 Rav 4. You drop collision because it’s older and it seems like a waste of money. The collision coverage probably costs you $750 per year. If the car sustains $3300 in damage but is worth $9000, the insurer will not total it and will not repair it. So, what are you going to do if your family needs to have the teen driving? Well, you could have kept collision on it for about $750 per year and the insurer would repair the car. Now, without collision you are out of luck. So, keep that in mind.