If you are driving an old car that is fully paid, you are in no obligation of keeping all options offered by your insurance company. Some of the vehicles loose their value rapidly. If you check the book value of a car, you will find that some people are paying an amount for the insurance that is more than the cost of the car. This does not make any sense. For very old cars, you can take the following steps to save money.
- Collision Insurance: We pay for the collision insurance for the replacement of our car in case something happens and the car becomes totally damaged. In general, you do not need it for an old car. Remove it from your insurance policy.
- Comprehensive Coverage: In general, it is a waste of money if you keep comprehensive coverage for an old vehicle. You are paying money to replace your car in case somebody damages your car. In general other people’s insurance will cover your car. If you are so unlucky that it is not replaced by other driver’s insurance, you yourself will be able to replace it with the money saved by removing comprehensive coverage. Remove it from your insurance policy.
- Liability Insurance: Carry only liability insurance on an old car. This is to cover other people’s car and health issue in case you are in an accident.
If you follow the instructions above, you will save money. If you put the money saved in a savings account for several years, you will be able to pay a large amount of money towards the payment of your next car.