My Car’s Getting Older, So Why Is My Insurance Still So High?
It’s a question we hear all the time:
“My car’s getting older and losing value—so why isn’t my insurance premium dropping?”
It seems logical that an older car would cost less to insure. After all, it’s worth less, right? Unfortunately, that’s not quite how insurance pricing works. Insurers consider more than just your car’s market value when calculating your premium.
Why your premium doesn’t automatically drop
It’s true—your vehicle’s actual cash value (the payout you’d get if it were totaled) declines over time. But most accidents don’t result in total losses. Instead, insurers are paying for repairs, not full replacements—and the cost to fix a 5-year-old car can be just as high as a brand-new one.
Labor costs, paint, and replacement parts all add up. And in some cases, parts for older models are harder to find, driving up repair expenses even more.
Other factors that affect your rate
Liability coverage stays the same: Your car’s age doesn’t change how much damage or injury you could cause in an accident. Liability coverage—protecting others—doesn’t decrease as your car depreciates.
Inflation: Repair costs, medical bills, and car parts get more expensive every year. Insurance premiums rise accordingly to keep up with those costs.
Claims and losses in your area: If your zip code has seen more accidents, thefts, or severe weather, rates can increase across the board—even if you personally have a clean record.
What you can do to lower your premium
Even if your car’s value is dropping, there are ways to help trim your costs:
Reevaluate your coverage
If your vehicle is older and fully paid off, you may consider dropping comprehensive and collision coverage. These cover damages to your car, but they only pay out up to its current market value (minus your deductible). For lower-value vehicles, that payout might not justify the premium.
Ask about discounts
You might qualify for savings you didn’t know existed:
Multi-car discount: Insure multiple vehicles on one policy.
Bundle your policies: Combine your auto and home coverage with the same insurer.
Low mileage: Driving fewer miles per year can earn a discount—just confirm your mileage with your insurer or sign up for their mileage program (if applicable).
Occupation or affiliation discounts: Some professions or memberships come with reduced rates.
Review your policy annually
Rates, coverage needs, and vehicle usage change over time. A quick yearly review with your insurance advisor helps ensure you’re not overpaying—or underinsured.
Even if your car is aging gracefully, that doesn’t always mean your premium will shrink along with it. But with the right adjustments and regular check-ins, you can make sure you’re getting the best value for your coverage.
Wang Insurance can help review your policy, identify available discounts, and make sure your coverage fits your car’s age and your driving habits.
