I get the peace of mind thing, but I keep wondering if it’s really worth it for an older car. Here’s how I look at it:
- If your car’s value is dropping every year, but your premium stays about the same, aren’t you just paying more for less coverage?
- I did the math on our minivan last year—if it got totaled, after the deductible and depreciation, the payout would barely cover a decent down payment on anything else.
- We’ve got a little emergency fund set aside, so I figure self-insuring for the “what if” scenarios might make more sense once the car’s not worth much.
Not saying everyone should drop coverage, but sometimes the numbers just don’t add up. Plus, dealing with insurance companies after an accident can be its own kind of stress...
Honestly, I’ve been thinking about this a lot since I started paying my own insurance. My car’s not worth much—like, if it got totaled, the payout would barely cover a semester’s worth of books. I totally get the peace of mind argument, but at some point, it just feels like throwing money away.
Here’s how I try to break it down: I look up the actual cash value of my car (KBB or whatever), subtract my deductible, and then compare that to what I’m paying for comp/collision every year. If the premium is close to what I’d get back, it seems pointless to keep paying. But then I start second-guessing—what if something wild happens and I’m out a car? Would I regret not having coverage?
I’m curious, though—has anyone actually dropped full coverage and then needed it later? Or is it usually just a “better safe than sorry” thing that never really pays off?
I’ve been in your spot before, weighing that “peace of mind” against the actual numbers. You nailed it with this:
If the premium is close to what I’d get back, it seems pointless to keep paying.
Here’s how I usually decide: First, I check if I could realistically replace my car out-of-pocket if something happened. If it wouldn’t wreck my finances, I drop comp/collision. But—true story—I once kept full coverage on a beater just because I parked on the street in a sketchy area. Never needed it, but I slept better. It really comes down to how much risk you’re cool with, and whether losing the car would be a minor setback or a total disaster for you.
Honestly, I dropped full coverage on my last car once it hit about 10 years old. The premiums just didn’t make sense anymore—if it got totaled, the payout would barely cover a decent used bike, let alone another car. I get why some folks hang onto it for peace of mind, but for me, it felt like throwing money away after a certain point. If you can stomach the risk and have a backup plan, I say cut it loose.
Here’s how I look at it:
- Once the car’s value drops below a certain point (usually under $4-5k for me), full coverage just doesn’t add up. The premiums plus deductible can easily outpace what you’d get back if it’s totaled.
- I ran the numbers last year on our 12-year-old minivan. The annual cost of full coverage was almost 15% of the car’s value. That’s wild.
- If you’ve got enough in savings to cover a sudden loss, liability-only makes sense. But if you’d be in a real bind without a payout, maybe keep it a bit longer.
- One thing I do: check the actual cash value every renewal. Insurance companies sometimes overestimate, but private sale prices are usually lower.
- Only exception for me is if you’re still making payments—lenders usually require full coverage.
I get the peace of mind argument, but at some point, it’s just not worth it. My spouse was nervous when we dropped ours, but after a year with no issues, it feels like the right call.
