­­­­­How much does used car insurance cost?

Buying a used car can be a great way to get a good deal on a vehicle, but it’s important to factor in the cost of insurance before you make your purchase.

If you're shopping for a used car, you're smart about your spending. After all, pre-owned vehicles are less expensive than new ones. Plus, your used car won't lose value the moment you drive it off the lot as a brand new car would.

But there's a catch – a used car may be cheaper, but getting insurance for a used car may not be. Luckily, our used car insurance calculator can help you compare rates and help you estimate how much you can expect to pay for insurance on your new used car.

We use data from Quadrant Information Services to calculate the average cost of insurance for different makes and models of cars.

Understanding the cost of car insurance for a used car ahead of time will help you stay within your budget and make an informed decision during the car-buying process.

Check out our Used Car Insurance Calculator now!

Do you need insurance to buy a used car?

Yes, you will need car insurance to buy a used car and drive it to your home. All states, except for New Hampshire and Virginia, require you to purchase car insurance, regardless of whether your car is new or used. Even in New Hampshire and Virginia, you'll be financially liable if you're involved in an accident.

The process to insure a used car is just like insuring a new car.

Keep in mind that car repairs can be expensive and arduous if the parts needed for repair aren’t available. Having to pay out-of-pocket in case of an accident may cost you far more than the annual used car insurance premium. 

How to get insurance before buying a used car?

Here’s the quick-and-dirty process of how to purchase car insurance for a used vehicle. 

Choose your desired vehicle:

Look at the options for the car you want to buy. To price insurance, it is necessary to have specific information about the car you want to buy.

Get vehicle information:

Once you have decided upon the vehicle, you should confirm your intent to buy the car with the dealer and get details like the make, model, vehicle identification number (VIN) and a vehicle history report, which will affect your overall insurance rate.

Determine which kind of insurance you would want to buy:

The cost of used car insurance could be lesser than that of a new car, but it really depends on the exact vehicle you want to buy. If you’re financing the car, you’ll have to purchase collision and comprehensive coverage in addition to the minimum liability required by your state. Remember to get at least three quotes from various car insurance companies.

Finalize your contract and pay for your policy:

Once you have decided on what insurance you want to purchase, you can fill out the required information online or by phone. The final step is to pay for your first month of coverage, and viola! Your new car is insured even before buying it.

Compare insurance rates for used cars

Car insurance rates are personalized to each driver based on different factors, like location, credit score and claim history. In addition, the year, make and model of your vehicle will determine how much you pay for coverage.

If you're in the market for a used car, it's a good idea to shop for car insurance while you search for your vehicle. You don't want to pick out a vehicle only to learn you can't afford the car insurance premium.

Once you've settled on a few contenders, you should compare car insurance rates to see what the cost of car insurance coverage is so you can account for it in your budget.

Used Car Insurance Rates by Model

To give you an idea of what you might pay for coverage, we've included a variety of used car insurance rates by the model in the table below.

These rates reflect a full coverage policy with 100/300/50 in personal liability coverage and a $500 deductible for collision and comprehensive insurance.

Even if the specific car you're considering isn't listed, this data should give you a ballpark range for your rate based on the vehicle's year and make:

As you can see, the make, model and year of your vehicle have a big impact on the cost of auto insurance for a used car. If your car has aftermarket parts, like custom rims or an upgraded stereo system, it's possible that the used car insurance cost could be even higher.

Typically, used cars that come with all the bells and whistles are more expensive to insure, because those things are often expensive to repair or replace in the event of a claim.

Used car insurance calculator

To find average rates for more than 3,500 used car models from 2006 to 2020, use our used car insurance calculator.

1. Choose the year of the car, your state, plus the make and model of the vehicle you are thinking of buying to find out how much, on average, you can expect to pay for auto insurance coverage.
2. On the results page, you can add more cars to compare to determine the used car insurance cost for other vehicles you have on your shortlist.

Full coverage is recommended for vehicles with the model year of 2011 or newer, so only full coverage (comprehensive and collision plus liability) rates are shown for these years. If you choose 2010 or older as the year, you will see rates for both full coverage and liability only on the vehicle.

Remember, if you carry liability only, your vehicle isn't covered by your car insurance policy in any way if it is damaged.

Once you have made your final choice, or if you're deadlocked between a couple of vehicles, get personalized car insurance quotes by providing the vehicle identification number, or the make and model, to insurance companies using our used car insurance calculator.

How much auto insurance coverage do you need before buying a used car?

As mentioned, your state has minimum liability insurance requirements. You may see the minimum coverage referred to as a set of numbers, such as 15/40/25 liability insurance, which means you must have coverage that includes $15,000 per person in bodily injury coverage, $40,000 per accident in bodily injury coverage, and $25,000 in property damage limits.

If you can't find your state's insurance requirements, don't worry. Most car insurance providers will know what you need when you enter your state or ZIP code for a quote.

Although your state has minimum requirements, it's up to you to decide if the coverage is enough.

You may want to buy a higher amount of coverage to protect yourself from out-of-pocket costs in case of circumstances such as:

• You rear-end a vehicle.
• Three passengers were injured.
• They each need X-rays and medical care, costing $15,000 each.
• The vehicle you rear-ended needs $7,500 in repairs.
• You also crashed into a wall to avoid the accident, which needs another $5,000 in repairs.
• In a 15/40/25 policy, $15,000 per person in medical bills is within the limits of your policy of $15,000 per person. But, in this circumstance, three parties were injured for a total of $45,000. That's $5,000 above-and-beyond the $40,000 your policy will cover. You'll be personally responsible for the extra $5,000 yourself.
• As for the property damage to the wall and vehicle of $12,500, it's covered as part of the $25,000 in property damage limits.

Keep in mind that liability insurance will help pay for any injuries and damages you caused to others, their vehicles and property if you're responsible for the accident, but it won't cover you or your car.

Depending on your used vehicle's value, you may want to add additional coverage to protect your car. Comprehensive insurance and collision coverage are two ways you can protect yourself – and your vehicle. Consider them as used car repair insurance for certain scenarios.

Comprehensive vs. collision insurance on a used car

Comprehensive insurance pays for damage to your car due to flooding, fire, vandalism and hail, and pays out the actual cash value of your car if it's stolen. Collision auto insurance covers damage to your car from accidents when you hit, or are hit, by another vehicle or object.

Comprehensive and collision car insurance are often purchased together to expand on your protections. They're not mandatory coverages unless you plan on financing your vehicle with an auto loan, in which case they’re required.

Are they worth the extra expense? If your car is less than 10 years old, or worth more than $3,000, it's wise to get them.

How do you get auto insurance for a used car when you already have car insurance?

If you already have car insurance, insuring a new-to-you-used car is pretty simple. Contact the company you're covered with and let them know you'd like to insure a different vehicle. The representative will ask you about the vehicle to tell you if there's a price difference.

You will also be given the option to choose your coverage for the used vehicle.

Example

If the vehicle is financed, you'll want to purchase a full coverage policy, even if your existing vehicle is only insured with minimum coverage. You can add endorsements, choose your coverage limits and set your deductibles.

When you purchase used car insurance, you should keep your existing vehicle on the policy, assuming you are holding onto it. If you're selling the vehicle, an agent can help you remove the car from the policy once it’s sold.

One thing to consider is that many insurance companies offer a discount if you insure two or more cars on your policy, whether they are new or used.

How does insurance work before you buy a used car if you don't have coverage?

Most major insurance companies make it easy to purchase a policy online, which is the most common way to purchase coverage.

Here are the steps to follow if you don't already have car insurance:

Provide your vehicle information:

When you apply for coverage, you'll need to input the car's VIN number, make, model, year, upgrades and mileage.

Besides your vehicle's information, you will also need to enter personal details about where you live, whether the car will be parked on the street or in a garage, and the number of miles you anticipate driving per year.

Choose your coverages:

Select liability coverage at a minimum and consider purchasing roadside assistance coverage, collision or comprehensive coverage.

Decide on a deductible:

The deductible is the amount you'd pay out-of-pocket if you were in a car accident before the insurer starts to pay. A typical car insurance deductible is $500 or $1,000.

The higher the deductible, the cheaper your used car’s insurance will be. If you bump up your deductible to save on your monthly premium, make sure you can afford to pay the deductible if you're in an accident.

Purchase the policy:

Once you complete the application and see your final rate, you can purchase a policy through the online checkout. Once you submit the insurance binder and proof of coverage to the dealership, you can then safely drive away with your car.

How long do you have to get insurance after buying a used car?

You'll need to have some type of car insurance when you purchase a used car. If you have existing coverage, your policy may offer a grace period that will automatically cover the used car until you can officially add it to the policy.

If you don't already have insurance, however, most car dealerships will require you to get a policy before the transaction can take place. They need to verify that your policy is current and that it meets the state's minimum coverage requirements.

Can I drive a used car home without auto insurance?

If you're buying a used car from a dealer, you'll need to show proof of insurance before you're allowed to drive away. Private sellers may not have that requirement, but driving an uninsured vehicle is risky.

If it's your first car, doing your homework ahead of time by having a saved policy quote will come in handy.

Most online insurers will provide instant coverage once you pay for the policy, so you simply log back in to access your quote, enter the missing details such as VIN and price paid for the car, pay your premium, show the dealer insurance proof, and you’re all set.

How to save money buying used car insurance?

There are a few things you can do to buy coverage and save money on car insurance for used car models: Student, hybrid vehicle, low-mileage, safe driver and military service discounts.

Prepay your premium: You could save money if you pay six months or a year in.

Look for discounts: Most car insurers offer a variety of discounts, such as good student or advance payment.

Sign up for autopay: If you link a bank account number and sign up for electronic statements and automatic payments, most car insurers will provide a small discount.

Bundle your policies: Loyalty comes with perks. If you already have other coverages such as homeowners or renters insurance with a particular insurer, you may receive a discount when you purchase used car insurance.

Opt for a higher deductible: The deductible is the amount of money you'd have to pay out of pocket in case of an accident before your insurance starts paying. You could save money on your monthly premiums if your deductible is higher. But be sure you can afford the new deductible.

You could take the savings on your monthly premiums and put it away in a savings account each month towards the amount of the deductible. That way, you've got the money saved up for a higher deductible if you're involved in an accident.

What's happening in the used car market?

If you've been keeping a pulse on the used car marketplace, you probably know that demand is high and inventory is low. It's important to know what factors are driving the current market because they could impact your shopping journey.

"The microchip shortage that is affecting new vehicle production has gotten to the point where inventory is so low new car shoppers are resorting to buying used cars," says Ivan Drury, senior manager of insights at Edmunds.

"This also has rental car agencies buying used vehicles to maintain daily demand, and holding onto their fleet of vehicles for longer than normal, which is reducing the supply of used cars for sale."

Information

According to a 2022 Cars.com survey, “two-thirds of car owners who traded in their vehicles received a higher offer than expected, about half of the respondents received more than $1,000 above their expected trade-in amount, and 20% reported they received $3,000 or more.”

So, when is the used car market expected to stabilize?

Nick Woolard

Lead Industry Analyst at TrueCar

According to Nick Woolard, "It's hard to say how long prices will remain elevated at the current levels. New vehicle production is expected to begin recovering … but it will take some time for the overall car market to adjust to the new equilibrium."

Other industry experts agree.

Zoriy Birenboym

CEO of eAutoLease.com

"I honestly don't see an end to the current market demand," says Zoriy Birenboym.

"In addition to the chip shortage, government sanctions are involved and we're simultaneously seeing a big push toward electric vehicles. It's a perfect storm of factors that may keep the market high for quite some time."

Should you buy a used car while the market is high?

Purchasing a used car is much more difficult when prices are historically high and there are fewer vehicles for sale. However, that doesn't necessarily mean you should put your used car search on hold. It just means that you need to be extra diligent while shopping to find a good deal.

Expert Advice

Ivan Drury

Senior manager of insights at Edmunds

"If you're a new car shopper looking at used cars, really focus on those Certified Pre-Owned (CPO) vehicles as they'll provide the most comparable amenities, warranty and possibly incentives," Drury says.

"When it comes to age and mileage, buy what is most comfortable or get quotes for an extended warranty either through a third party or from the dealer."

Rather than purchasing a brand new car, many drivers are taking the lease route or trading in their old car.

If you're looking to get rid of your current vehicle, now is a great time to trade it in. "Trade-in values have increased just as sharply as used values, so you don't want to leave any money on the table," Drury says.

Frequently asked questions about used car insurance

More Resources:

1. Subaru car insurance cost
2. Mercedes car insurance cost
3. Honda car insurance cost
4. Toyota car insurance cost
5. Tesla car insurance cost
6. Jeep car insurance cost

Sources:

1. Cars.com - “What are the used cars with the highest rising resale value?” Accessed May 5, 2022.
2. Truecar - New & Used Cars for Sale, Car Pricing & Reviews
3. Edmunds - New Cars, Used Cars, Car Reviews and Pricing
4. Kelley Blue Book - New and Used Car Price Values, Expert Car Reviews
5. NADA Values - Used Car Values & Car Book Values
6. eAutoLease - New York’s Auto Leasing

– Elizabeth Rivelli contributed to this story.