Best Insurance for a Used Car

Keep these tips in mind when shopping for insurance for your pre-owned vehicle.

What's the best insurance for a used car?

Purchasing a used car — or a “pre-owned vehicle,” in dealership-speak — involves a different process than does buying a new car. Depending on the value of the vehicle and your manner of purchase, your car insurance premiums may be impacted as well.

Let’s explore the ins and outs of buying insurance for a used car or truck, as well as which car insurance company is cheapest for you.

 

See rates for your used vehicle now!

 

Buying car insurance for a used vehicle
  1. Before you buy
  2. How to get quotes
  3. Cheapest companies
  4. How to save
  5. Frequently asked questions

 


 

What to know when buying a used car

Although buyers often overlook this step, it is vital to get a used car inspection before purchasing the vehicle. Most dealers and private sellers will allow you to take the car for inspection or host a mobile session at their home or dealership. If they don’t allow you to do this, consider it a warning sign, i.e., there’s something the seller doesn't want you to know.

In addition to getting an inspection, you should absolutely run a Carfax report. Using the VIN, a Carfax report can tell you the accident report of the vehicle as well as other important information. Just like getting an inspection, this report is useful for determining if the value of the vehicle.

 

 


 

What you need to get car insurance for a used vehicle

If the vehicle passes inspection and everything seems in order, your next step is to purchase an insurance policy for your used car. If you buy your car from a dealership, the dealer will most likely require proof of insurance prior to your driving the vehicle off the lot. If this is the case, you'll want all the information necessary to get insured as soon as possible. Here’s what you will need:

  • Date of birth of drivers using the vehicle
  • Driver’s license numbers of drivers using the vehicle
  • Garaging address of vehicle (most likely your address)
  • Insurance history of drivers using the vehicle
  • Driving history of drivers using the vehicle
  • Vehicle Identification Number (VIN), which will provide the vehicle’s vital information, including make/model

A VIN is especially important for a used vehicle, as they show the vehicle’s entire history. If the vehicle has been previously totaled and salvaged, this would show up on the VIN. This is another important reason to get your used vehicle inspected prior to purchasing. Some car insurance companies will deny coverage if a vehicle has been salvaged, based on the risk presented by a repaired vehicle.

Should I get car insurance before buying the car?

Once you find the vehicle you want, you can get a used car insurance quote before purchasing the vehicle by using the VIN. Dealerships often list the VIN on their websites, providing an accurate estimate of your car insurance quote. Most insurance companies will then supply a quote number, which you can use to retrieve the saved quote.

Once you activate the policy, your new insurance company will send the proof of insurance to the car dealer and you, and you’ll be able to drive off the lot. Simple as that!

 

Ready to get quotes for your used vehicle?

 

Cheapest insurance companies for a used car

In order to find the cheapest car insurance companies for a used vehicle, we surveyed the policies offered by top US companies on a 2013 Honda Accord. While this vehicle and driving profile won’t match you exactly, the data should function as a jumping off point in the search for cheap car insurance. Here are the results.

 

USED CAR INSURANCE — 6-MONTH PREMIUMS
CompanyPremium
Allstate$786
Geico$709
Farmers$677
Liberty Mutual$736
Nationwide$644
Progressive$729
State Farm$748
USAA$734

 

With all other metrics constant, Nationwide offers the cheapest car insurance company for a used car. Use this data as a baseline and start your search for cheap car insurance here.

How does age impact your vehicle's premium?

As your vehicle ages, its premium will decrease by 2.5%. A vehicle that is one year old is over 18% more expensive to insure than a vehicle that is 7 years old. 

chart for used car insurance

 

Compare more than 200 insurance companies!

 

Other ways to save on used car insurance

In addition to shopping around to find the lowest used car insurance rates, we’ve outlined some other policy initiatives you can take while trying to keep your premium affordable. Let’s get started.

 

Use your insurance coverage sparingly

Unless you have accident forgiveness built into your policy, car insurance companies tend to financially penalize you for filing a claim. So, if you’ve been in a collision-type accident and are thinking about filing a claim, consider our advice first.

  • Get an estimate for the repairs at a local mechanic shop
  • Use our State of Insurance analysis to see how much an at-fault accident (what this would be considered as) would raise your premium in your state. Consider this increase each year for 3 years - as that’s how long most insurance companies would charge you. Include your collision deductible in this, if it applies. Below, we've outlined a general US average of the rate increase you can expect for filing an at-fault accident.
  • Choose the cheapest long-term option.

 

AVERAGE CAR INSURANCE COST INCREASES AFTER AN AT-FAULT CLAIM
Increase at 6 monthsIncrease at 12 monthsIncrease at 3 Years
+$291+$582+$1,746

 

In this example, we’re only talking about collision claims. Comprehensive, uninsured motorist claims and not-at-fault accidents typically don’t raise premiums as dramatically as collision claims. If your insurance company rates your not-at-fault accidents as at-fault accidents, consider it as a good opportunity to explore other companies.

If you were the at-fault party and the other driver wants to involve insurance companies, you don't have an option.

 

Choose suitable insurance coverage

By this, we are referring to modifying your insurance coverage to suit the value of your vehicle. Most insurance experts advise if your vehicle is paid off and worth less than $4,000, you may not physical coverage on it. By physical coverage, we are referring to comprehensive and collision coverage. Unlike your liability coverage, these are designed to protect your vehicle and are merited based on a presumed value of your vehicle. You can determine the value of your vehicle by using Kelley Blue Book or NADA guide online.

If your vehicle is worth more than $4,000 but you still want to save, consider increasing your deductible. Because your premium and deductible are inversely related, you can lower your premium by raising your deductible.

 

AVERAGE CAR INSURANCE RATES BY COVERAGE LEVEL
Coverage LevelAverage Annual Premium
Liability Only$672
$500 Deductible$1,427
$1,000 Deductible$1,268

 

Another benefit of this is your decreased incentive to use your deductible, rather than paying out for damages yourself. As we learned from the section above, using your collision coverage can have long-lasting effects on your insurance. By decreasing the dollar value you would receive as compensation, there is less of an incentive to file a claim.

 

Double check for discounts

While most of these discounts are small, they can add up to make your premium more affordable.

Shop around

After it’s all said and done, you might be paying too much because your car insurance company simply isn’t that affordable. The best way to find cheap car insurance is by weighing as many options as possible. 

 

Compare rates for your used car today!

 

Additional resources:

Still have questions awaiting answers? See our additional articles!

 

 

Frequently asked questions

 

Can you get gap insurance for a used car?

This will depend on the value of the used vehicle. Just because a vehicle is used, does not mean it isn't valuable. Gap insurance is designed to cover the difference between the amount of the loan and the actual cost value of the vehicle - what your insurance company will pay out in the event the vehicle is totaled. If you are financing a used vehicle with a high depreciation rate and had a low down payment, you should still look for a car insurance policy with gap insurance. For more information on gap insurance, see here.

What are the cheapest used cars to insure?

While there is no exact answer for this, generally early 2000's sedans are the cheapest used vehicles to insure. Because of their value, you generally do not need comprehensive or collision coverage and only your state required liability limits.

Do I need insurance before I buy a used car?

As is true with any vehicle, you need insurance before buying and driving a vehicle off the lot. For the best practices regarding quoting a new vehicle, see our guide here.

 


 

Methodology

Review our full methodology.