October, 2025 | Boizelle Insurance Partnership

Insuring Old Cars vs. New Cars

In general, it is cheaper to insure an older car than a brand-new one — but with important caveats. Here’s a breakdown of why, and what to watch out for.

 Why older cars often cost less to insure

1. Lower replacement value: Older vehicles are worth less, so if they’re written off or damaged, the payout to the insurer is lower.
2. Simpler repair costs: Older cars tend to have less complex technology, which can reduce repair costs (though not always).
3. Less required coverage: If you own an older car outright, you may opt to drop collision or comprehensive coverage (if it doesn’t make financial sense), leaving only minimum liability. That makes the premium lower.
4. Depreciation effect: As a car ages, its value goes down, which tends to bring down insurance cost gradually.

Why newer cars tend to cost more to insure

1. Higher value / replacement cost: Newer cars cost more to replace or repair, so the insurer’s risk is higher.
2. Advanced technology & parts: Modern vehicles may include sensors, cameras, advanced electronics — which can be expensive to fix.
3. Loan / lease requirements: If you’re financing or leasing a new car, the lender may require full coverage (collision + comprehensive), which increases premium.
4. Potential theft risk: Some newer or popular models are more prone to theft, which can raise rates.

 But — it’s not guaranteed

There are exceptions and additional factors to consider:

• The make, model, engine size, and risk profile of the car matter a lot. A cheap old car with high theft risk or rare parts could cost more to insure than a newer car with good safety features.
• Safety features in newer cars can reduce the risk of accidents and may lead to discounts, which could mitigate some of the extra cost.
• The difference in premium by car age tends to shrink after a certain age or depending on how the insurer views the risk. For example, a 5-year-old car might be ~10-12% cheaper to insure than a brand new car according to some studies.
• For very old, classic, rare, or vintage vehicles, insurance might actually be more expensive because of rarity of parts, restoration cost, or specialized policy needs.

What this means for you

• If you buy a standard older car (not luxury/exotic) and you’re comfortable dropping higher coverages if appropriate — you’ll likely pay lower insurance than if you buy new.
• If you buy a new or recent car, you should budget for higher insurance, but you may offset that with safety/anti-theft features, shop around, and ask for discounts.
• Always get quotes for the specific make, model, year, and coverage level — because age is just one factor among many.
• Consider whether dropping collision/comprehensive coverage makes sense when the car’s value is low enough — for older cars that may make financial sense.

Insuring a “classic” or collector vehicle is different in important ways from standard auto insurance. Below are the key considerations and cost ranges, plus what drives the price up or down.

What is “classic car insurance”

A typical “classic car insurance” policy is aimed at vehicles that are:

• Either a certain age (often 20-25+ years old) or of collectible/historic value.
• Used less frequently (often for pleasure driving, shows, events) rather than as a daily commuter.
• Sometimes stored in better conditions (garage, protected) and well maintained.
• Offered “agreed value” coverage rather than standard “actual cash value” (i.e., insurer and owner agree ahead of time what the car is worth).

These policies reflect the special risk profile: rarer usage, potentially higher value, and different types of damage/loss concerns (eg: theft of a rare part, restoration value, etc).

Typical cost ranges

Here are some ballpark numbers (U.S. average) for classic car insurance premiums:

• Many sources report $200 to $600 per year for “typical” classic car policies.
• Some sources give a broader range: $400 to $1,000 per year, depending on vehicle value, coverage, usage.
• In contrast, traditional full-coverage insurance for everyday cars may cost significantly more (for example monthly premiums in some cases $200+).
• For very high-value collector cars (rare, exotic) the cost can be even higher—notably the article mentions insurance costs for classic & collector cars in the $1,000-$3,000+ yearly range for premium vehicles.

So: if you own a reasonably valued classic, you may pay much less than if you were insuring a typical modern daily driver — but the “much less” depends heavily on usage limits and coverage terms.

 What drives the cost (and possible discounts)

Cost-drivers (things that increase premium)

• High agreed-value: If the car is rare/valuable, replacement/repair costs may be high.
• Frequent use / high mileage: If you drive it like a daily driver, risk goes up and insurers may charge more or disqualify you.
• Poor storage/protection: A car left outside, or not well-maintained, is considered higher risk.
• Modifications/ racing use / exotic parts: These make repair/parts cost higher and may increase premium.
• Location/insurance market conditions/driver history: Same as any insurance policy.

Cost-savers (things that reduce premium)

• Limited usage / mileage caps: Many classic car policies restrict how many miles you drive annually, which lowers risk.
• Indoor/secure storage: Garage keeping, less exposure to damage/theft.
• Membership in car clubs / being in a recognized “collector car” program: Some insurers offer discounts.
• Good driving record: As with any insurance.
• Choosing appropriate coverage/deductible: If you choose higher deductible, or fewer miles driven, you may pay less.
• Agreed-value coverage: While this may cost more than standard liability only, it can avoid under-insurance risk and sometimes yield better value for the premium.

 Things to watch / special terms

• Usage restrictions: Many classic-car policies will not allow daily commuting or unlimited miles. If you use the car daily, you might be required to take a regular auto policy instead.
• Agreed value vs actual cash value: With agreed value you and the insurer agree ahead of time what the car is worth, so if it’s stolen or totaled you get that amount (minus deductible) rather than a depreciated value. That is often a key benefit for classics.
• Storage and maintenance condition requirements: The insurer may require you to store it in a locked garage, keep it in good condition, limit its use, etc.
• Limited availability: Not all mainstream insurers offer classic car policies; many owners go with specialist insurers.
• Premiums can still be significant: If the car is very high value or if you drive it a lot or treat it like a daily driver, you may not get the “cheap” benefit of classic car insurance.

Example from a forum: > “For my 91 Nissan Skyline GTR I’m paying 2 k/yr. I might need to call them and figure out why it’s so expensive.”

• Make sure coverage fits your needs: For example, spare-parts coverage, restoration value, show usage, are these included or optional?
• Comparisons matter: Get quotes from multiple insurers with specialist collector-car policies, especially since your situation (value, usage, location) will markedly affect cost.

If you own a classic car (used for occasional driving/showing, properly stored, high value, etc), you can often get insurance for hundreds of dollars per year rather than thousands. Many expect something in the $200-$600 annual premium range for a “normal” collector car. But the “classic” designation doesn’t guarantee cheap — it depends a lot on usage, value, coverage, and insurer.