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Is comp needed on an older vehicle?


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Question: Do older cars really get stolen?  My Honda is older; I’m thinking of dropping full coverage to save some money. 

Answer: Yes, older cars do indeed get stolen.  While you may think a nice new, shiny car would be what thieves have their eyes on, it’s really older vehicles that are stolen more often. 

You have to remember that newer cars have newer -- and better -- anti-theft technology in them. This means improved anti-theft devices as well as more advanced ways to find or stop a stolen car using items such as GPS tracking and kill switches.  Typically, thieves like easy pickings, and older cars offer that.

Just last week, the National Insurance Crime Bureau (NICB) released its annual “Hot Wheels” list of the most stolen vehicles for the U.S.  (See “The most stolen cars in every state” to see if your vehicle ranks.)

The NICB report shows that older Honda Accords and Civics were, by far, the most stolen model vehicles in 2012.  Older model Accords and Civics accounted for the first 16 spots on the most stolen list.  With 8,637 thefts, the 1996 Accord led the list.  The NICB notes that newer Hondas are rarely stolen due to the improved technology we already mentioned.

The “Hot Wheels” report is the most comprehensive one on stolen vehicles because it examines all theft data. Other reports usually look at just stolen car claims -- and of course all stolen cars aren’t actually covered by auto insurance. 

Keep or drop full coverage?

Reducing costs by removing some car insurance coverages may be a good idea; it really depends upon your financial situation and what coverages you want to give up.

As you should know, comprehensive is the only portion of a car insurance policy that will cover a stolen vehicle.  If you drop it, then you’re without a way to make an insurance claim if your vehicle ends up in the hands of a thief.  You’ll be out a car and have only the thief, if caught, to seek compensation from.

Collision, the part of a “full coverage” car insurance policy that covers your vehicle for damages resulting from your vehicle colliding with another vehicle or object, is usually purchased along with comprehensive coverage. Some car insurance companies, in fact, insist you either purchase both comp and collision or turn down both coverages.

Thus, you need to look at if the costs of both of your physical damage coverages to see if they are worth it financially for you at this point in your car’s life.   My basic recommendations for dropping comp and collision are:

  • Keep full coverage until the car is paid off
  • Build an emergency fund, then raise your comprehensive and collision deductibles
  • When you would no longer pay to fix the car for a major mechanical issue, like a new transmission, then it’s time to drop comp and collision completely

Don’t just drop full coverage because you don’t think your car would be stolen or it’s unlikely you’ll be hit. 

If you find you really would like to keep full coverage, then look at other ways to save, which could include:

  • Raising deductibles
  • Dropping medical coverages, such as uninsured motorist or MedPay, if you find that your own health insurance would be adequate for injuries suffered in an auto accident.
  • Lowering liability limits.  If you carry liability limits higher than the state minimum you could lower them; however, I’d warn against doing this unless you don’t have many assets to protect.
  • Shop around.  By comparison shopping for car insurance quotes, you may find you’re able to keep all of the coverages you currently carry and save money -- several hundred dollars a year even -- just by switching auto insurance providers.

More articles from Penny Gusner


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