Trying to get an idea if we should keep full coverage on my son's car. It is a 2005 Acura TL. It is running us about $900 a year currently.

Thanks

quote:

2005 Acura TL

Did a KBB review on an average equiped TL with the typical options, 150K miles, values range from $1500 to $2500, average trade is $2000.

If you take the premium add the deductible then compare to the total value to see if it makes financial sense.

$900 plus $1000 deductible means you are going to net $100 after deductible and premiums on a total of the vehicle, might as well self insure.

The instant this BMW is paid off, it is going to get no fault and comp only.

quote:

Did a KBB review on an average equiped TL with the typical options, 150K miles, values range from $1500 to $2500, average trade is $2000.

If you take the premium add the deductible then compare to the total value to see if it makes financial sense.

$900 plus $1000 deductible means you are going to net $100 after deductible and premiums on a total of the vehicle, might as well self insure.

That's the correct analysis.
You need comp/collision when a car would be too expensive to replace out-of-pocket.
If your son takes that $900/year and saves it, he's ahead after the first year or so, way ahead if he can avoid an accident for longer.

Thanks, this is the type of feedback I was looking for

Also you need to check what the difference in between full coverage and liability only, usually you'll save quite a bit, you'll still have some cost but it's necessary (liability and comp coverage) for protection from others coming after your assets either with a screwdriver or lawyer...

Consider putting the car in his name if he's over 18, put the liability coverage in his name, it's good for him to have credit and it removes it from your asset list just in case he's involved in a situation that could threaten your net worth.

Doesn’t some of that $900 cover liability/underinsured motorist? Those coverages are pretty much mandatory.

Yes it does, he'll have to check what the rate differences are when making that decision however Liability only will always be less than full coverage.

I was going to do Liability only when putting the new to us Frontier on our policy but it was really really cheap to upgrade to full coverage.

quote:

Trying to get an idea if we should keep full coverage on my son's car. It is a 2005 Acura TL. It is running us about $900 a year currently.

I was initially under the impression that $900 a year was the difference between liability only and full coverage. Looking back at the OP, it's unclear if that is the total premium or the difference for full coverage.

Full coverage was $900 a year. Liability only is $213 a year.

At about $700/year difference and even a $500 ded, he'd be break even or better in 2 years and only need $800 extra beyond the premium and $500 ded. in a total loss accident after year one.

Personally, I'd be taking a hard look when a car is worth about $5k or less, I haven't ever had an accident though.

According to my agent, statistics show the average driver has a claim once every 7 years. Do the math.

Here in NW Montana, you’d better leave deer killing insurance in force.

quote:

Originally posted by Censored:
Full coverage was $900 a year. Liability only is $213 a year.

So you can cover liability only 4 years for the same as one year of full coverage, on a $2500 car I'd pocket the difference every year from 900 to $200 into a savings account, at the end you'll have a $1500 car and $2800 in the bank to use toward a new car..

I keep full coverage on all my vehicles, four of them. they are all paid off and I am unwilling to take the gamble on liability insurance only.

In the past ten years our vehicles have been involved in 7 accidents none of which were not our fault. 3 of the accidents were deer vs car (Pa has ranked second for the last 10 years in deer vs car accidents). Wife was T-boned when uninsured driver failed to stop at a stop sign.

We had our truck hit three times by uninsured,unlicensed, and drunk drivers who owned nothing of value (one while driving and two while truck was parked) during the day light hours. I just call the insurance company and drop the problem in the insurance company's lap, this is well the additional money we pay for the full coverage.

quote:

Originally posted by HRK:

quote:

Originally posted by Censored:
Full coverage was $900 a year. Liability only is $213 a year.

So you can cover liability only 4 years for the same as one year of full coverage, on a $2500 car I'd pocket the difference every year from 900 to $200 into a savings account, at the end you'll have a $1500 car and $2800 in the bank to use toward a new car..

That's exactly how I'd be looking at it.


In the past I've typically dropped full coverage within a couple years of paying off my vehicles. However, my 12 year old pickup still books for nearly 20K give or take - that still has full coverage.

I maintain full coverage until I've paid it off. After that, insurance is a losing proposition.

I had a 2000 Durango I bought brand new. Paid it off in 2005. I took collision off of it around 2014, with about 190,000 miles on it. I totaled it in Nov 2015 on snow with 196,000 miles on it. Wasn't worth a ton, probably around $5k. Got $350 from the junkyard for it. Sometimes you roll the dice and win, sometimes you lose.

Depends on the value of the vehicle. Or how much I like it. I carry full coverage on one car and it is a 2011. The rest are collision.

For me it's $68 a month for full coverage, I don't care that my car is paid off, it's worth it to me to avoid paying for insurance on rentals, uninsured motorist coverage, vandalism/break it's, windshield coverage, etc.

For a $2,000 car, I'd skip full coverage.