Is It Cheaper To Insure an Older Car? What Drivers Should Know

When I traded in a newer sedan and purchased an older minivan (I'm entering my dog mom era), I expected my car payments to be more affordable. But I was pleasantly surprised to find that my car insurance premiums dropped too. With an older vehicle with a lower value, the cost of owning the minivan was much lower overall.

My experience isn't unusual. And, with sky-high car prices — the average cost of a new car was $48,039 in 2025, up nearly 24% from 2020 — people are holding onto cars longer. According to S & P Global, the average age of vehicles on the road was 12.6 years in 2024, a new record.

So is insurance cheaper for older cars? Or did I just get lucky? Whether you're postponing replacing your current vehicle to save money or are thinking about downsizing to an older car, you may be wondering how the age of the vehicle may affect your premiums. And, in most cases, an older car will be less expensive to insure.

Is insurance cheaper for older cars?

Several factors affect the cost of car insurance, including the car's make, model, age, and mileage.

In general, older cars are cheaper to insure than newer vehicles. For example, we requested quotes from a leading insurer for a Toyota Rav 4. For a full coverage policy on a 2025 model, the annual cost of coverage was $1,804.80. The annual premium for a 2020 model was $1,603.40 — about $200 less per year.

Annual Premiums By Model Year
	Toyota Rav 4
2025 Model	$1,804.80
2020 Model	$1,603.40
*Quotes are based on a driver with a clean record in Florida who covers 15,000 miles per year. The quotes are for full coverage policies with 100/300/100 limits.

According to The Zebra, a car insurance comparison site, insurance rates drop by about 3% every year your vehicle ages. The lower insurance cost is due to the following reasons.

• Parts are more readily accessible: With new models, repairing the vehicle after an accident can be challenging. Used parts are scarce for new cars, so any repairs have to use new parts ordered directly from the manufacturer, which is typically more expensive.
• It's cheaper to replace: Cars are depreciating assets. As the car ages and you rack up miles on the odometer, its value decreases. As a result, older cars are relatively inexpensive to replace, so your car insurance rates are lower since you're less of a financial risk.
• Most mechanics can fix your car: With some new cars, finding a repair shop equipped to fix your vehicle can be difficult. For example, with some electric cars, you can only visit certain shops with workers who undergo specialized training, and they may have weeks-long waiting lists. Older cars don't have that problem. Most mechanics can handle the repairs, so hiring someone to fix your car is easier (and cheaper).

Coverage options for older cars

In nearly every state, laws require drivers to have car insurance. Policies must meet the state's minimum liability requirements, but you may need coverage above and beyond those minimums.

The requirements vary by state; for example, in Alaska, drivers must have policies that meet 50/100/25 minimums, meaning it must include $50,000 of bodily liability insurance for one person, $100,000 of bodily injury protection for two or more people per accident, and $25,000 in property damage coverage.

By contrast, the requirements for Louisiana drivers are much lower. Policies must meet 15/30/25 minimums.

Depending on the age, mileage, make, and model, you may need additional coverage. Two other types of insurance to consider are collision and comprehensive coverage.

• Collision: Collision insurance pays for the repairs or replacement of your own vehicle after an accident. The maximum coverage level for collision insurance is the actual cash value (ACV) of your vehicle.
• Comprehensive: Comprehensive insurance pays for repairs or replacement of your vehicle due to damages that occur outside of an accident, such as damage related to weather or theft. As with collision insurance, the maximum limit for comprehensive insurance is your car's ACV.

Liability coverage is the only form of insurance you're legally required to have, and comprehensive and collision insurance are usually optional.

However, if you're financing an older car with a car loan, the lender may require you to purchase collision and comprehensive insurance. You must maintain those coverages until the loan is paid in full to protect the lender's investment.

Classic car insurance

When we talk about older cars, we mean cars less than 25 years old. Vehicles older than that are classic, antique, or vintage vehicles and may need different forms of coverage.

If you plan on using a car that is 25 years old or older daily, you can get traditional coverage. But, if your car is a collectible or show vehicle, you'll need a classic car policy.

These policies differ from traditional car insurance coverage in several key ways.

• Valuation: After an accident, traditional car insurance policies will only pay you for the ACV, the stated cash value of your car. With them, your 1975 Chevrolet Camaro may be valued as low as $5,150. By contrast, classic car coverage bases your reimbursement on agreed value; you submit what you think the vehicle is worth, and the insurance company assesses the car and confirms the value. With a classic car insurance policy using agreed value, that same vehicle could be valued as high as $20,000.
• Age limits: In general, only cars more than 25 years old are eligible for classic car insurance policies.
• Usage: Cars insured under a classic car insurance policy can only be used occasionally, such as weekend drives, car shows, or a special event. Some companies require you to provide proof that you own a modern car to use as your daily automobile.
• Storage: To qualify for a classic car insurance policy, insurers typically require you to keep the vehicle in a secure, enclosed garage.

Classic car insurance policies are available through companies like American Collectors Insurance, Chubb, Grundy, and Hagerty. Because of the associated policy restrictions, classic car coverage is often cheaper than traditional car insurance. Your policy could be 25% to 50% cheaper than if you insured your car with a traditional policy.

Ways to lower your premium on an older car

Even though older vehicles are usually cheaper to insure than newer cars, there are ways to reduce your premiums even more.

• Cancel collision and comprehensive insurance: Depending on the age and value of your car, the cost of collision and comprehensive insurance may not be worth it. On average, canceling these forms of coverage could allow you to save nearly $600 per year.
• Increase your deductible: Your deductible, or your share of the cost of repairs before your insurance helps out, impacts your premiums. Generally, the lower the deductible, the higher your premiums will be. Raising your deductible — for example, raising it from $250 to $1,000 — can reduce your premiums. According to the Insurance Information Institute, raising your deductible can reduce your premiums by 15% to 40%.
• Sign up for usage-based insurance: Usage-based insurance (UBI) policies base your premiums on how much you drive and your driving habits by tracking your driving with a telematics device or mobile app. If you drive fewer-than-average miles and always obey speed limits, for example, you could qualify for significant savings.
• Shop around: Rates for car insurance vary by company, so it's a good idea to compare rates from several insurers at least once a year.

FAQs

Bottom line

Is insurance cheaper for older cars? When you're deciding whether to replace your car or not, it's an important question to ask.

While car insurance policies are generally cheaper for older vehicles, there are several factors that affect your rates besides the car's age, including your driving history, vehicle usage, and whether you qualify for any discount programs. To find the most affordable coverage, compare rates from the best car insurance companies.