What's the best auto insurance for a used car?

Purchasing a used car — or a “pre-owned vehicle,” in dealership-speak — involves a different process than 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 the cheapest for you.

 

Insurance for a used vehicle and average car insurance rates
  1. Before you buy
  2. What you'll need
  3. What are the cheapest companies for a used car?
  4. Other ways 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 an 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 auto 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 the vehicle (most likely your address)
  • Insurance history of drivers using the vehicle
  • Driving record 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 auto 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!

Factors that insurers use to calculate your auto insurance rate include your age, location, credit score, driving history, marital status, and more. Maintaining a good credit score and clean driving record free of DUIs, hit-and-runs, and other egregious violations make a big difference in whether or not you'll be stuck with higher rates. Learn more about the factors that influence what you pay for car insurance.

 

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Cost of car insurance for a used car: what are the cheapest companies?

In order to find the cheapest car insurance companies for a used vehicle, we surveyed policies offered by top US companies for a variety of the most popular used cars, with model years ranging from 2014, 2017, and 2018. While these vehicles 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.

 

See the average cost of car insurance for these vehicles:

 

USED HONDA ACCORD AVERAGE 6-MONTH PREMIUMS
Company201420172018
Allstate$925$1,053$1,104
Farmers$765$836$871
GEICO$629$720$851
Liberty Mutual$806$872$897
Nationwide$582$590$586
Progressive$775$795$594
State Farm$665$709$744
USAA$486$534$533

 

USED HONDA CIVIC AVERAGE 6-MONTH PREMIUMS
Company201420172018
Allstate$961$1,074$1,115
Farmers$925$1,034$1,067
GEICO$702$796$953
Liberty Mutual$851$910$943
Nationwide$754$734$720
Progressive$728$761$771
State Farm$691$758$777
USAA$494$536$537

 

USED TOYOTA CAMRY AVERAGE 6-MONTH PREMIUMS
Company201420172018
Allstate$928$1,060$1,085
Farmers$811$860$874
GEICO$697$735$749
Liberty Mutual$819$862$893
Nationwide$680$679$667
Progressive$763$802$813
State Farm$680$705$720
USAA$496$537$566

 

USED TOYOTA COROLLA AVERAGE 6-MONTH PREMIUMS
Company201420172018
Allstate$953$1,065$1,111
Farmers$802$883$908
GEICO$703$812$836
Liberty Mutual$800$867$871
Nationwide$727$730$717
Progressive$720$750$759
State Farm$674$718$735
USAA$485$511$499

 

With all other metrics constant, USAA was the cheapest car insurance company for these popular used vehicles. If you can't qualify for USAA, Nationwide came in second for these used cars. The 2014 Honda Accord was the cheapest used car to insure with average rates of $704 for a six-month premium or $117 per month. Use this data as a baseline and start your search for cheap car insurance with us. 

 

How does vehicle age impact your premium?

As your vehicle ages, its premium will decrease by 3.4% on average with each additional year. A vehicle that is one year old is over 16% more expensive to insure than a vehicle that is seven years old. 

Premiums by Vehicle Age.png

 

 

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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 auto 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 — would raise your premium in your state. Consider this increase each year for three years — that’s how long most insurance companies would charge you. Include your collision deductible in this, if it applies. Below, we've outlined the general US average of the rate increase you can expect for filing an at-fault accident.
  • Choose the cheapest long-term option.

 

AVERAGE COST INCREASES AFTER AN AT-FAULT CLAIM
Increase at 6 monthsIncrease at 12 monthsIncrease at 3 Years
+$394+$767+$2,301

 

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 need physical coverage on it. By physical coverage, we are referring to collision and comprehensive coverage. Unlike your liability coverage, these are designed to protect your vehicle should it suffer any property damage 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. Knowing how much car insurance you need and being savvy with your coverage needs can be effective ways to save on your premium.

 

AVERAGE CAR INSURANCE COSTS BY COVERAGE LEVEL
Coverage levelAverage annual premium
Liability Only$719
$500 Deductible$1,548
$1,000 Deductible$1,373

 

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.

Learn more about popular car insurance discounts.

 

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. Enter your zip code below to see what you could be paying instead!

 

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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 payout 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, learn more here.

What are the cheapest used cars to insure?

While there is no exact answer for this, generally early 2000s 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.

 

Additional resources

Still have questions awaiting answers? See our additional articles!

 


 

Methodology

Review our full methodology.