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

Dropping full coverage doesn't mean 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 protection has nothing to do with your own car's value, which is why it makes sense to keep it regardless of vehicle age. For questions of how much liability insurance to buy or more on whether to add comprehensive and collision insurance, see how much car insurance do I need.

Vehicle age is the biggest driver of used car insurance cost. A 2017–2021 used car averages $150 per month, a 1999–2016 model averages $124 per month, and 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. Comparing rates across insurers for your specific vehicle helps you find the cheapest car insurance available for your make and model.

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 while a 2021 Dodge Challenger costs $207 per month. Both are from the same model year. Comparing rates by your specific make and model gives you more accurate expectations than relying on year-group averages alone.

For the most common everyday cars on the road, the insurance savings from buying used instead of new are substantial. The table below shows average monthly cost for a 2025 new model versus a 2015–2019 used version of the same car. The Hyundai Elantra shows the largest gap: a 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 show more moderate but still meaningful gaps, both saving 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 more modest 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. The table below shows the lowest-cost models across all makes in that model year range, sorted by minimum coverage rate.

Used car insurance rates depend on the same factors as new car insurance, but vehicle age and condition introduce variables that don't apply to new cars.

The 2021 Buick Encore costs $30 per month for minimum coverage and $58 per month for full coverage, a $28 per month gap that reflects the coverage-level decision in practice. The steps below show how to reach the lowest total cost for your specific vehicle.