Used Car Insurance: Everything You Need to Know

Car insurance is a requirement for drivers whether they buy a new or used car. Though you may save money buying a used car, insurance rates for used vehicles may not always be significantly cheaper. However, this can vary dramatically depending on your car’s make and model.

• Comparing the Cost of Used Car Insurance
• Best Cheap Insurance for Used Cars
• Car Insurance Options for Used Cars
• Factors That Affect Used Car Insurance Costs
• How to Save on the Cost of Used Car Insurance
• Frequently Asked Questions

Knowing the cost of used car insurance can be helpful when you’re trying to decide if you should buy a new or used car. Not all used cars are significantly less expensive to insure, and the cheapest used car insurance may not be enough to justify buying a used car over a new car.

Some of the top-selling used cars are significantly cheaper to insure than a brand new vehicle, while others are only slightly less expensive.

For example, it costs $1,609 to purchase full coverage insurance for a new Dodge Ram 2500, while the same model five years older costs $1,470 — that’s a difference of $139.

On the other hand, a new Ford F-150 costs $1,269 to insure, but a five-year-old model only costs $1,227. That’s a difference of just $42 for the same coverage.

While some used cars are expensive to insure, some makes and models cost substantially less because of factors like mileage, cost to repair and safety features. We found that Subaru Forester, Honda CR-V and Jeep Patriot have the cheapest car insurance rates of all used vehicles.

MoneyGeek found the five models have the cheapest used car insurance price for full coverage.

When buying car insurance for used cars, most people want to find the best company with the cheapest rates. Rates vary widely by provider — even for the same coverage — so it’s important to know which company offers the most affordable insurance for the vehicle you drive.

MoneyGeek checked the coverage for the 10 most popular used cars from different insurance companies and found that GEICO and USAA tend to offer the most affordable rates.

When you buy car insurance for a used car, you have options on what coverage to add to your policy. Some are required, like liability insurance, while others are optional, like collision, comprehensive and gap insurance. Consider these coverages and whether the protection they provide is worth the cost when shopping for used car insurance.

Liability car insurance is required in nearly every state because it covers the other driver if you cause an accident. Bodily injury liability pays for the other driver and their passengers’ medical bills and lost wages if you cause injuries during an at-fault accident.

Part of liability insurance, property damage liability pays to repair or replace another person’s property if you damage it in an accident. This property could be another person’s car or home, but it also covers damages to property owned by the government or a business building. Without this coverage, you may be personally responsible for paying for any property you damage when at fault in an accident.

Comprehensive and collision insurance are optional coverages unless you have a used car loan and your lender requires them. When determining if you need physical damage coverage, consider the coverage cost and the value of the used car. For vehicles that hold their value over time — like trucks — it may be worth the extra cost to purchase full coverage used car insurance instead of liability only.

Another optional used car insurance coverage is gap insurance. This coverage is for used cars with a loan or lease and pays the difference between the car’s value and the loan balance if the vehicle is totaled.

Whether you need gap insurance on a used car depends on your lender, loan term and the size of your down payment. Gap insurance can protect you financially because the longer you pay off your loan, or the larger your balance, the higher the risk that you’ll be paying a loan far higher than your car is worth.

If by chance your lender requires gap insurance, you won’t have a choice but to get the coverage. Lenders usually don’t require gap coverage, but it may be a good idea to buy it if your car is worth less than your loan balance before you pay it off.

There are many factors used to determine used car insurance rates. Some are specific to your vehicle — its price, repair costs and the likelihood of it being stolen. Others are personal, like your driving record, coverage choices and zip code. The price of used cars has also been steadily increasing since 2015, which may mean full coverage is more expensive because of higher replacement costs.