Used-Car Insurance: Costs, Coverage, and How to Save
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Written byDoug Bailey
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Doug BaileySenior Content Writer
15 years at the Boston Globe
5+ years covering insurance industry
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Edited byJohn Leach
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John LeachLicensed P&C Agent, Chief Copy Editor
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
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Reviewed byDavid Marlett
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David MarlettAdvisor
25 years teaching risk management and insurance course
Former commercial lines underwriter
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Data reviewed byKonstantin Halachev
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Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Updated
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Used-car insurance is typically less expensive than coverage for a new vehicle because older cars usually cost less to repair or replace. There isn’t a separate insurance product for used cars, though — insurers base premiums on a vehicle’s year, make, model, value, and other risk factors.
This guide explains how much used-car insurance costs, when full coverage makes sense, and whether gap insurance is worth considering.
Quick Facts
Used-car insurance costs an average of $204 per month nationwide for full coverage, according to Insurify data.
The cost of liability insurance for a used car typically decreases more slowly than collision coverage and comprehensive premiums because liability claims aren’t tied to vehicle value.
Insurify data shows some older Subaru Outback models cost substantially less to insure than newer model years due to lower replacement costs.
Is used-car insurance cheaper than new-car insurance?
In most cases, used-vehicle insurance rates are lower than rates for comparable new vehicles.
The primary reason is simple: Older vehicles have lower market values. Since collision and comprehensive insurance pay to repair or replace your vehicle after a covered loss, insurers face smaller potential payouts for older cars. That usually means lower premiums.
Liability coverage works differently. Your liability insurance pays for property damage and bodily injury you cause to others. And you may also have uninsured motorist protection. Vehicle age has little effect on those portions of your premium.
Still, not every used car is cheap to insure. A used luxury SUV, sports car, or theft-prone vehicle may cost more to insure than a brand-new economy car.[1]
For example, newer Subaru Outback models generally carry higher premiums than older Outbacks because replacement costs are higher. Insurify data shows Outback premiums averaging $94 per month for liability coverage and $169 per month for full coverage for 2026 models. Meanwhile, a 2019 model averages $78 per month for liability coverage and $145 for full coverage.
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How much does used-car insurance cost?
Used-car insurance costs an average of $204 per month nationwide for full coverage, according to Insurify quote data.
Factors that have the biggest effect on used-car insurance rates include:
Vehicle value
Driver age
Driving history and record
ZIP code
Credit score and credit history (where permitted)
Annual mileage
Coverage selections
Two vehicles of the same age can have dramatically different premiums. Insurers also consider safety ratings, theft frequency, repair costs, parts availability, and claim history when setting rates.
Here, you can see average rates for some of the nation’s most popular used vehicles.
Popular Used Vehicle | Average Monthly Quote: Liability Only | Average Monthly Quote: Full Coverage |
|---|---|---|
| 2022 BMW X5 | $103 | $264 |
| 2022 Hyundai IONIQ 5 | $101 | $244 |
| 2022 Ford GT | $104 | $286 |
| 2022 Mazda CX-5 | $106 | $182 |
| 2023 Chevrolet Silverado | $107 | $220 |
| 2023 BMW X3 | $101 | $263 |
| 2023 Toyota Crown | $116 | $254 |
| 2023 Infiniti QX60 | $107 | $257 |
| 2023 Genesis GV70 | $107 | $238 |
| 2023 Nissan Rogue | $109 | $213 |
Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.
Average used-car insurance rates by vehicle age
Vehicle age and premium costs generally move in opposite directions. As a vehicle gets older and loses value, insurers normally reduce collision and comprehensive rates because replacement costs also decline.
The biggest drops usually occur during the first five to 10 years of ownership. After that, savings tend to level off because liability coverage becomes a larger share of the total premium. As such, vehicles become cheaper to insure.
Here, you can see how coverage rates shift as a vehicle ages, as well as the coverage you may want to consider given the age of your vehicle.
Vehicle Age | Average Monthly Rate: Liability Only | Average Monthly Rate: Full Coverage | Coverage Recommendation |
|---|---|---|---|
| 2 years | $108 | $249 | Full coverage |
| 5 years | $107 | $237 | Full coverage |
| 10 years | $111 | $216 | Liability only |
| 15 years | $112 | $174 | Liability only |
| 20+ years | $96 | $150 | Liability only |
Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.
Cheapest insurance companies for used cars
Finding the cheapest used-car insurance company starts with comparing quotes. Rates vary widely by insurer, even for the same vehicle and driver profile. That’s why it’s important to compare quotes from at least three to five companies before selecting a new policy.
The companies below offer some of the lowest average premiums, according to Insurify quote data, for vehicles from the 2006, 2011, and 2016 model years. Remember that the actual rate you pay will depend on several factors, such as your driving history, location, coverage selections, vehicle type, and more.
Insurance Company | Average Monthly Rate: 2006 Model | Average Monthly Rate: 2011 Model | Average Monthly Rate: 2016 Model |
|---|---|---|---|
| USAA | $77 | $90 | $111 |
| State Farm | $80 | $93 | $116 |
| Erie | $94 | $109 | $135 |
| Mile Auto | $104 | $120 | $149 |
| Allstate | $111 | $128 | $159 |
| GEICO | $111 | $128 | $159 |
| American Family | $121 | $141 | $175 |
| Direct Auto | $125 | $145 | $180 |
| Mercury | $126 | $146 | $181 |
| National General | $130 | $150 | $187 |
Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.
Full coverage vs. liability only on a used car
Full coverage generally makes the most sense when your vehicle still has substantial value or when you can’t afford to replace it after a total loss.
Full coverage combines liability insurance with collision and comprehensive coverage. And while it doesn’t cover every possible loss, it does protect your vehicle from accidents, theft, vandalism, weather damage, and certain other covered events. Liability-only coverage doesn’t cover your vehicle in these instances and will cover only the damage others sustain in an accident you cause.
Not surprisingly, then, liability coverage can be significantly cheaper. Nationwide, liability-only coverage averages about $98 per month, while full coverage averages roughly $187 per month, according to Insurify data.
If you borrowed money for your used car, your lender will almost certainly require you to maintain full coverage until the car loan is paid off. And regardless of vehicle age, state-minimum liability insurance requirements still apply.
Expert’s insight
“If you’re not sure whether you need full or minimum coverage for your used car, it helps to compare your car’s value against the cost of adding collision and comprehensive coverage. If your car is worth relatively little, full coverage may cost more annually than the car itself, so liability-only coverage might make more sense. But for a pricier vehicle with costly repairs, full coverage can help cover those expenses.”
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Donald BlumeLicensed Property & Casualty Insurance Agent
When to drop full coverage on a used car
Many insurance professionals use a version of the “10% rule.” If your annual premium for comprehensive and collision coverage exceeds roughly 10% of your vehicle’s value, it may be time to reconsider this coverage.[2]
For example, imagine your 10-year-old sedan is worth $5,000, and comprehensive and collision costs you $700 annually. In this case, the $700 exceeds the 10% rule ($500), and the math may not favor keeping full coverage.
But if you lack emergency savings or couldn’t easily replace your vehicle, you may still benefit from keeping full coverage, even when the numbers appear marginal.
And remember that lenders generally prohibit dropping full coverage on financed used cars.
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Is gap insurance worth it on a used car?
Gap insurance covers the difference between your vehicle’s actual cash value and your remaining loan balance after a total loss.[3]
Many drivers assume gap insurance for used cars isn’t necessary, but that’s not always true.
A financed used car can depreciate quickly, especially if you made a small down payment, rolled taxes and fees into the loan, or chose a long repayment term.
Not every lender requires gap insurance, but some do.
Gap insurance often makes sense if:
You financed for 60 months or longer.
You made a down payment of less than 20%.
Your loan balance exceeds the vehicle’s value.
You’re buying a vehicle that depreciates rapidly.
What ‘used’ actually means to your insurance company
To an insurer, a used vehicle is simply an older vehicle with a different value profile.
When calculating used-vehicle insurance rates, insurers don’t use a special category called “used-car insurance.” Instead, they evaluate the specific year, make, model, trim level, repair costs, theft history, and expected claim severity.
That’s why a 3-year-old luxury SUV can cost more to insure than a brand-new compact sedan.
How to insure a used car before leaving the dealership
Most states require you to show a valid driver’s license and proof of insurance before you can legally drive a newly purchased vehicle off the lot.
If you already have an active auto insurance policy, contact your insurer before completing the purchase. Many companies offer a temporary grace period, but coverage details vary by insurer and state.
If you don’t have coverage, you’ll need to purchase a car insurance policy before taking possession of the vehicle.
The best approach is to gather the vehicle identification number (VIN) in advance and compare used-car insurance quotes before finalizing the purchase.
How to get cheap used-car insurance
Used-car owners have several opportunities to lower premiums:
Take advantage of various insurance discounts, such as bundling and good driver.
Match coverage to the vehicle’s market value rather than maintaining unnecessary coverage.
Increase your deductible if you have emergency savings available.
Compare quotes before purchasing a vehicle since insurance costs vary significantly by model.
Consider dropping collision and comprehensive coverage when an older vehicle’s value becomes very low.
Ask about low-mileage discounts if you drive less than average, since mileage and insurance costs are often linked.
Used-car insurance FAQs
Buying a used vehicle often raises questions about car insurance coverage. Here are answers to some of the most common concerns.
Is insurance cheaper for used cars than for new cars?
Usually, yes. Older vehicles generally cost less to repair or replace, reducing collision and comprehensive premiums. But liability coverage and uninsured/underinsured motorist coverage costs often remain similar across vehicles, regardless of vehicle age.
How much does it cost to insure a used car per month?
Used-car insurance averages about $204 per month for full coverage nationwide, according to Insurify quote data. Your actual rate depends on the vehicle, location, driving record, and coverage level.
Do you need full coverage on a used car?
Maybe not. Full coverage is most valuable when a vehicle retains significant value or when a lender requires it. Many owners of older vehicles eventually switch to liability-only coverage.
How long do you have to add a used car to your insurance policy?
Many insurers offer a grace period for newly purchased vehicles, but the length varies by company and state. It’s safest to notify your insurer before driving the vehicle home.
Is gap insurance worth it on a used car?
Gap insurance can be worthwhile if you owe more than the vehicle is worth. It’s especially useful for long-term loans, small down payments, and rapidly depreciating vehicles.
At what age should you drop full coverage on your used car?
There’s no universal age. Many drivers reassess coverage when a vehicle reaches 10 to 15 years old, but the decision should depend on vehicle value, premiums, deductibles, and financial circumstances.
Does your insurance go down when your car gets older?
Often, yes. As vehicle value falls, collision and comprehensive premiums typically decline. But inflation, repair costs, claims trends, and state-specific factors can still cause overall premiums to rise.
Sources
- Kelley Blue Book. "Do I Need Collision Insurance on an Older Car?."
- Consumer Reports. "How Much Car Insurance Do You Need?."
- Heritage Family Credit Union. "What is GAP Insurance & Should I Get it?."
Methodology
Insurify data scientists analyzed more than 250 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 500+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
)
Doug BaileySenior Content Writer
15 years at the Boston Globe
5+ years covering insurance industry
John LeachLicensed P&C Agent, Chief Copy Editor
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
Featured in
David MarlettAdvisor
25 years teaching risk management and insurance course
Former commercial lines underwriter
Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology