You may have an older automobile that you are planning to change in a year or two. It may not be worth more than couple of thousand dollars. What would be the best way of insuring an older car cheaply and saving some money toward the new one?
This would pretty much depend on your own circumstances. For example, are you a good driver, living in the countryside or in a city, do you have any savings to pay for a new car, how dependent are you on this vehicle? Deductibles are another are to think about.
General advise is that you can drop Collision and Comprehensive coverage for a car below about $4,000, especially if you have some savings just in case. Sometimes, if you do not have any savings it may be better to keep paying the monthly vehicle insurance premium. Otherwise, you would have no money to fall back to if something happens to your automobile.
Another option is to increase the deductibles so that your auto insurance premium can come down. In this case, you will not be able to make a claim for small damages. But you may get some money if the car is totaled. For example, increasing deductibles from $250 to $500 would reduce your chances of making a claim on a car worth $2,000. But you would get about $1,500 if it is a total loss.
Living in a big city would mean higher risk of getting involved in accidents. On the other hand, you would save more money if you drop Collision and Comprehensive Covers due to higher premiums in the cities. To determine the course of action you like to take, I advise you to get several car insurance quotes from different companies as well as for different level of coverage. For example, get one quote for liabilities only and another quote for full coverage. See the difference to find out if the savings make it worth dropping some coverage.
It is difficult to give a straight answer as to what is the best auto insurance coverage for you. This is a decision you need to make. However, buying liabilities only coverage may make sense when you buy insurance for older cars. This decision would be easier when you have access to another vehicle or have a reliable public transport in your area. On the other hand, you may have to think twice when you are living in a rural area and your car is the only means of transport.
Furthermore, insurers take the age and value of your automobile into account anyway and offer you good savings. That is why you should always check the price difference between buying liability vs full coverage car insurance only. If the premium isn’t really different much you may be safer with a better coverage even though it means you pay a little more. Policy requirements are as individual as people. What is good and acceptable for me may not really be the best solution for you. Take your time to learn as much as you can, get prices and compare them. This will help you make an healthy decision.