Updated: November 21, 2024
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A full coverage auto insurance policy isn’t necessary to drive your used car. But you’ll need a policy that at least meets the state minimum coverage requirement. Lessors and lenders may also include full coverage insurance as a requirement, even for used cars, to protect their investment.
You may also want to consider full coverage car insurance if you plan on getting a used sport, luxury or classic car, depending on the actual cash value (ACV) of the vehicle.
Each state has a minimum coverage requirement that car owners and/or drivers need to meet. Full coverage insurance isn’t mandated by law in any state.
Lessors and lenders typically require full coverage, even on used cars. This is to protect their investment.
Individual circumstances matter when deciding whether to get full coverage on a used car. You may want full coverage if you have a sports, luxury or classic car, but rising costs suggest that full coverage may be a good idea for any used car.
Full coverage insurance isn’t typically required for used cars. However, you may want to get this type of policy if your used car’s actual cash value (ACV) is significantly higher than the annual cost of a full coverage policy. ACV refers to the market price of your vehicle. It’s the claim amount your insurance company will pay should the car be totaled.
You may also want to consider getting this protection if you’re getting an expensive used car, such as a sports car or a classic car.
Full coverage insurance for used cars, or any car, isn’t required in any state. Drivers are only required by law to carry an auto insurance policy that meets the state minimum coverage requirement. Those coverage amount limits may vary per state but don’t differ between owning a new or used car. Most insurance professionals recommend drivers carry coverage levels higher than state minimums for greater financial protection.
You need to have a car insurance policy to legally drive a car, whether new or used. The amount of coverage you need will depend on where you live. Each state has its own minimum car insurance requirements. No state requires full coverage insurance.
Lessors and lenders usually require full coverage for financed and leased cars to protect their investments regardless of whether the vehicle is new or used. Some lenders may even require gap insurance on a used car.
Each lease or loan agreement details the term conditions. Such conditions include the number of years it’ll take to finish repayment and the type of car insurance you need to carry during the term of the agreement.
You need to consider various factors when determining if you should get full coverage on a used car. One of the most important is the ACV of your vehicle.
In most cases, a full coverage policy would only be worth it if your car’s ACV exceeds the cost of the insurance policy. This is to ensure full protection. With the rising costs of used cars over the past three years, purchasing full coverage for used vehicles has become more common for all types of vehicles, not just expensive cars.
On average, drivers spend $1,187 per year for a full coverage car insurance policy. Full coverage refers to a policy that combines different insurance coverages, like comprehensive and collision. It’s typically more expensive than a minimum coverage policy.
Comparing quotes and offers will help you find cheap full coverage car insurance. Based on average rates, Geico has the most affordable policy at $1,032 per year.
Actual rates may vary depending on individualized factors, such as your driver profile and the type of car you’re driving. The following shows how costs may vary across car models.
About 80% of U.S. drivers carry comprehensive and collision coverage. The average premium for comprehensive is typically under $200 annually and the average premium for collision runs about $400 to $500 a year; taking higher deductibles can lower these costs. — Mark Friedlander, Director, Corporate Communications, Insurance Information Institute
Another factor affecting the average cost of car insurance is the insurance provider. Different companies charge different rates. The table below breaks down how much, on average, a driver may expect to pay for a full coverage policy on a used vehicle with one of the leading insurance companies.
| USAA | $283 |
| USAA | $357 |
| USAA | $403 |
| USAA | $403 |
| State Farm | $409 |
| GEICO | $424 |
| Nationwide | $462 |
| Travelers | $504 |
| Nationwide | $506 |
| Progressive | $514 |
| State Farm | $523 |
| Farmers | $572 |
| GEICO | $579 |
| Allstate | $604 |
| Nationwide | $611 |
| Nationwide | $611 |
| USAA | $614 |
| USAA | $618 |
| Travelers | $621 |
| State Farm | $651 |
| State Farm | $651 |
| Progressive | $666 |
| USAA | $679 |
| USAA | $683 |
| GEICO | $686 |
| GEICO | $686 |
| USAA | $688 |
| USAA | $716 |
| USAA | $721 |
| Farmers | $731 |
| Allstate | $738 |
| State Farm | $743 |
| Travelers | $753 |
| Travelers | $753 |
| USAA | $753 |
| Progressive | $765 |
| Progressive | $765 |
| GEICO | $782 |
| State Farm | $787 |
| USAA | $790 |
| GEICO | $795 |
| State Farm | $834 |
| State Farm | $839 |
| Allstate | $851 |
| Allstate | $851 |
| Nationwide | $876 |
| GEICO | $879 |
| State Farm | $883 |
| Farmers | $883 |
| Farmers | $883 |
| Nationwide | $901 |
| Nationwide | $905 |
| Travelers | $915 |
| GEICO | $923 |
| Nationwide | $930 |
| State Farm | $931 |
| GEICO | $936 |
| Travelers | $936 |
| State Farm | $937 |
| Progressive | $940 |
| Allstate | $976 |
| State Farm | $981 |
| Progressive | $985 |
| Nationwide | $988 |
| Travelers | $998 |
| Allstate | $1,008 |
| Nationwide | $1,013 |
| Farmers | $1,014 |
| GEICO | $1,015 |
| Travelers | $1,015 |
| GEICO | $1,020 |
| GEICO | $1,028 |
| State Farm | $1,029 |
| Travelers | $1,037 |
| Farmers | $1,045 |
| Nationwide | $1,048 |
| Progressive | $1,076 |
| Nationwide | $1,077 |
| Allstate | $1,092 |
| Progressive | $1,097 |
| Travelers | $1,099 |
| GEICO | $1,112 |
| Allstate | $1,114 |
| Travelers | $1,115 |
| Progressive | $1,120 |
| Allstate | $1,124 |
| Travelers | $1,137 |
| Farmers | $1,149 |
| Nationwide | $1,160 |
| Progressive | $1,160 |
| Farmers | $1,160 |
| Allstate | $1,177 |
| Farmers | $1,192 |
| Travelers | $1,199 |
| Progressive | $1,204 |
| Allstate | $1,209 |
| Allstate | $1,230 |
| Progressive | $1,232 |
| Farmers | $1,294 |
| Farmers | $1,296 |
| Allstate | $1,315 |
| Progressive | $1,317 |
| Farmers | $1,326 |
| Farmers | $1,430 |
Full coverage isn’t always necessary for used cars, especially if it’s an older vehicle. However, it’s best to determine the ACV of your car first before purchasing a car insurance policy. If your vehicle’s ACV is less than the cost of your full coverage insurance, it may be better to drop your comprehensive and collision coverage.
A full coverage policy is a combination of different insurance coverages. In most cases, these include liability, comprehensive and collision insurance. Some policies may also include uninsured or underinsured motorist coverage and personal injury protection coverage. Depending on your needs and the insurance provider, you may also have the option to add other coverages for an additional fee.
Coverage Type | Description |
|---|---|
Helps pay for the treatment of injuries the other party incurred in an accident where the policyholder is at fault. It also covers property damage to the other party. | |
Helps pay for the cost to repair damages to the policyholder’s vehicle (including windshield replacement) due to non-collision incidents, such as fire, weather-related events, vandalism and theft. | |
Helps pay for repair costs should the policyholder’s vehicle get damaged after a collision with another vehicle or object. | |
Provides additional protection in the event of a car accident caused by a driver who is either uninsured or underinsured, and also covers hit-and-runs. | |
Also called no-fault car insurance, Personal Injury Protection (PIP) helps pay for medical expenses incurred by the driver and their passengers regardless of who is at fault in an accident. |
Choosing full coverage can result in higher insurance premiums. If you find the cost to be too expensive, you can start with the cheapest full coverage insurance available for your car. Comparing quotes from different companies can also help you find the best auto insurance that balances affordability and quality service.
The best full coverage car insurance rates may vary per person. And different insurance companies calculate premiums differently. Comparing quotes and shopping around will help you find the most suitable policy for your needs and budget. You can also use MoneyGeek's free online quote tool to get an estimate of how much your car insurance policy would cost.
Whether you need full coverage on an old car will depend on your circumstances. But while it is a personal choice, knowing the answers to the most commonly asked questions can help you make a well-informed decision.
The answer to whether you need full coverage on your used car is: it depends. You may want a full coverage policy for maximum protection due to the rising costs of used cars. Lessors and lenders may also require full coverage for leased and loaned vehicles.
If the actual cash value of your vehicle is less than the cost of your full coverage policy, you may be spending more than what your car is worth. Thus, it may be best to drop your full coverage car insurance.
Comprehensive coverage isn’t always necessary for used cars. However, if you own an expensive car, such as a sports, classic or luxury vehicle, it may be wise to have comprehensive coverage, but the rising costs of all cars means that it may be a good idea to consider comprehensive coverage for any used car.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
