Car Insurance for Used Cars

If you're still making payments on a used car, your lender decides the coverage question. Lenders require full coverage for the life of the loan, regardless of how old or low-value the vehicle is. That requirement disappears the day the loan is paid off, which is when the decision becomes yours.

For a car you own outright, apply the 10% test: compare what you pay for full coverage in a year to what your car would sell for today. If your annual insurance bill exceeds 10% of the car's current market value, you're likely paying more to protect the vehicle than it's worth to replace. For example:

Suppose you have a car with a cash value of $5,000 and a $600 annual premium for full coverage. A total loss claim on that $5,000 car with a $500 deductible would net you $4,500. At that rate, nine years of premiums would equal the payout from a single total loss claim. For a much more valuable car with similar insurance payments, you're getting much better value.

You can drop full coverage without going without insurance. Minimum liability coverage is required in all states except New Hampshire and protects you if you cause an accident and damage someone else's vehicle or injure another person. That financial protection has nothing to do with your own car's value, which is why it makes sense to keep it regardless of vehicle age. MoneyGeek's coverage guide walks through both the liability and full coverage decisions with specific limit recommendations for different financial situations.

Vehicle age is the biggest driver of used car insurance cost. A 2017-2021 used car averages $150 per month and a 1999-2016 model averages $124 per month. A new 2025 vehicle averages $201 per month. The difference is almost entirely explained by replacement value.

Older cars cost less to replace, so comprehensive and collision premiums fall faster than liability premiums as vehicles age. The 1999-2016 group averages $124 per month because lower replacement values push down comprehensive and collision costs, which make up most of the gap between year groups. Running quotes for your specific make and model gives you a more accurate figure than year-group averages alone.

Within any model year group, the spread between the cheapest and most expensive model often exceeds the gap between year groups. A 2021 Buick Encore costs $30 per month for minimum coverage. A 2021 Dodge Challenger costs $207 per month. Both are from the same model year.

For the most common everyday cars on the road, buying used instead of new can save $60 to $135 a month on insurance, depending on the model. The Hyundai Elantra shows the largest gap: the used 2015-2019 version averages $118 per month while the 2025 model averages $253 per month, a difference of $135 per month ($1,620 per year) on the same make and model. The Toyota Corolla and Honda Civic each save around $60 per month for the used versus new version.

The savings come almost entirely from full coverage. Because older vehicles are worth less, the comprehensive and collision portion of the premium is lower, while the liability portion stays roughly the same regardless of vehicle age.

Drivers who plan to carry only minimum coverage will see smaller insurance savings from buying used. The financial case is strongest for those who would otherwise need full coverage on a new model.

The 2021 Buick Encore is the cheapest 2017-2021 model to insure, at $30 per month for minimum coverage and $58 per month for full coverage. Sorted by minimum coverage rate, the cheapest 2017-2021 models across all makes are listed below.