From my experience, there are two ways to reduce car insurance costs: get older and comparison shop for insurance quotes. I recently did the latter, and was pleasantly surprised to get an almost 20% reduction from my previous carrier. But the really big reductions over the years came from the first way. Combined, my car insurance costs have dropped by 87.3%. Or is it 91.7%?
In 1973, I found myself for a spell in Baltimore, and needed some cheap wheels. I found a clean ’63 Beetle for $300 ($1529 adjusted) that just needed some fresh points to run like a top again. I went to the Maryland DMV to register it and had a very rude awakening: I needed to show proof of insurance! WTF? In Iowa, there was no such requirement, and I’d driven insurance-free for several years there (accident free too, fortunately).
Someone suggested Geico, but back then qualifying for it was not that easy. I was twenty, so they sent me to their high-risk unit, called Criterion. It was the best I could do, but the price (for basic liability only) was a shocker: $350! ($1784 adjusted) Jeez; that was more than I paid for the car. Fortunately, I had a job, but that insurance payment really hurt big time. And it somewhat encouraged me to head back west before long.
Admittedly, that expensive insurance policy ended up come in handy: a couple of months later, after an epic cross-Canada trip, I found myself back in Iowa. On an outing, I ran a partially-obscured stop sign in a strange town (full story here), and totaled a ’69 Ford Country Sedan (why did they call it a “sedan” anyway?) station wagon in the process. Surprisingly, the VW survived, with some mismatched front fenders and hood from a junker. And the insurance paid the claim for the Ford, of course.
Over the decades since, I’ve watched our car insurance costs melt away as we’ve gotten older, moved to Eugene, had kids move out, and eliminated Comprehensive coverage on our cars (I don’t consider it worthwhile when a car crosses under the $10k value threshold). Today, I pay $114 for six months’ coverage on my Xb, and that includes a higher liability max ($300k/$300k) than the minimum required.
Now I’m not sure, but I seem to remember that that $350 premium in 1973 was for a full year, thus the 87.3% reduction to today. But if I’m wrong, and it was only for six months, then it was a 91.7% reduction. There are many benefits to getting older, but improved memory obviously isn’t one of them.
Car insurance costs have gone down, but health insurance skyrockets. Not being of Medicare age, (mostly I have been self employed my entire life) I’ve seen my health insurance soar from $ 350 in 1982 to $ 8,000 in 2012. It will continue to rise dramatically in the next five years until Medicare.
Currently, at $ 625 a month, I can only imagine the dream car I could be driving, instead of cancelled checks. My late mother used to say ” Be glad you don’t have the big time ailments that the insurance company would lose money on.”
Like my mother, I’d rather pay for coverage and not need it.
A very familiar story, and don’t get me started on the whole boondogle of health care in this country. I’m in a similar situation as you, and have kept our individual policy at a semi-reasonable level ($331/mo) only by having a $10,000 deductible. Which means it’s just catastrophic coverage; the rest is out of pocket. We’re highly motivated to stay healthy and not see the doc unless there’s a good reason.
One of the best things that ever happened to me was turning 25, in 1992. I got a letter from my insurance company congratulating me on reaching that important milestone, for which they would be cutting my insurance rate by about 45%. I had been paying $1,400 per year to insure my ’89 Beretta, and suddenly it dropped to somewhere in the $800 range.
I’m 45 today, and I don’t pay that much per year for both of my cars combined, an ’03 Matrix and an ’06 Focus. I did drop everything but liability on the Matrix, though; it’s old, in rough shape, and has more than 150k miles; the appraiser app at edmunds.com says I can get about $2,000 for it in a private sale.
My older son will get his license late spring/early summer, and I’m going to add him as a driver on the Matrix (it will essentially be his), so we’ll see what happens to my premiums then.
” so we’ll see what happens to my premiums then.”
I don’t think you will like it. 🙁
I’m bracing for impact.
I added my son to my policy when he got his license. His car is a 99 Camry hand-me-down from my mother. Now that he is away at school it mostly sits in the garage. The insurance premium on him and his car is more than what my wife and I pay COMBINED.
advice – don’t live in NJ!
My last speeding ticket was in 1985, and put me over the points threshold to loose my license. I went to “DUI School” (I’m not a drinker, so no DUIs on my record!) and got my license back a couple days later, but the insurance company nailed me a few months later when their records were updated.
I had a Suzuki Samauri at the time, was in my early twenties and was a single male.
$4,000 and change was the total for a year’s worth of high deductible insurance.
I sold the truck and bought a motorcycle (about $350/six months), which I wrapped around a pasture fence pole about a year later (I’m now a half-inch shorter on the left side due to that accident).
I think it was around that time I started driving an air-cooled Volkswagen as my daily.
We’re back down to the $400/six months range now for our three vehicles, one of which is a 4WD farm truck. Once the boys got their own cars, they had to pick up their own insurance (incentive to drive responsibly).
BTW, that’s a great looking ’63. The points thing seems to be common, as I’ve revived a couple of air-cooled VWs that way.
That one’s from the web, but it looks exactly like the one I had (before its accident).
I’m glad I’m not the only one who saw this and thought “What a clean looking Beetle.”
In the country, insurance can be brutal. When I lived in California, I used 20th (later 21st) Century insurance, but when we moved to Darkest Eastern Oregon, the service droid clutched her pearls and quoted something slightly above extortionate. “You want to live in the COUNTRY!?!?” We went with the outfit that insures our home and the prices were reasonable. Considering that we get ice on the roads from December to early March, I’m happy.
When we got the third vehicle, the prices were kind of high–no exclusion for multiple vehicles. A talk to the agent and we got a check for about 500 back and a lower bill. To insure a: 98 Ranger, ’03 Silverado, a ’12 Forester and a ’00 Coleman tent trailer, now costs $725 a year, all on clean driving records. Two drivers. It was worth asking the agent.
When there are more cars than drivers in a household, you can often put one on an occasional use basis. I did that with my Miata. Safeco sends me a postcard every year asking for its odometer, and it works out fine.
Yeah, we’re already reduced, since both of us are retired. The Forester is now our weekly grocery getter for the 40 miles into Klamath Falls (we use a pickup truck for big runs to Medford a few times a year) and it only got 6000 miles in a year. My ’03 Silverado has about 70K miles on it, and with high gasoline prices and 15-16mpg, won’t hit 100K for a while.
Here in NC, we have a very aggressive Insurance Commission system that, IMO, has managed to keep insurance premiums on most items in check. So much in check that there is a small controversy brewing right now about insurance along the coast lines for flood. But that is another story, as car as car insurance goes I can’t say that I complain. All of my cars over 25 years old are covered by Hagerty under their collector umbrella policy. For 6 old cars I pay $445 a year. The total value of all 6 cars is about $80,000. That is full coverage. In North Carolina, liability is mandated (and I believe to be a good thing) and inspections are mandated (also I believe to be a good thing to a certain extent details we can argue). I pay $560 a year for good coverage on my house valued at $298,000 (avg home price about $145K in my county) all through State Farm. My 93 Buick Century station wagon has liability, comprehensive (theft, glass, etc.), but not collision (I will fix it myself) I pay $89 every 3 months. For the Buick, 2010 Camaro, 2008 Cadillac CTS 2 adult drivers no kids full insurance on the Camaro, CTS we pay $1,200 a year. So I pay $1,700 a year for 9 cars. Add another $250 for registration fees that’s about $2,000 a year. Not too shabby me thinks.
Age helps some
Type of car helps a lot
Level of insurance helps some
Location helps some
Tsk, Tsk, – no insurance in your Iowa days. I would certainly never recommend that today. There are lots of folks who still wake up every morning and decide to go without insurance for another day. Then they find out why they call them “accidents.” When the folks they hit have to turn in their damage to their own companies, the files eventually find their way to me, resulting in a judgment and a license suspension, and years of monthly payments.
This is a sad topic for me. I have 3 kids under 22 on a policy, covering 4 cars. Somewhere around $1700/6 months, even with clean records. Like some of you, I am also self employed, and pay the equivalent of a cheap-but-serviceable used car every month for high deductible health insurance. Then disability, homeowners, life, malpractice, and I am probably forgetting one or two. My eventual death may single-handedly throw the insurance industry into a recession.
Mea culpa. That was a long time ago….and I’m sure it became mandatory some time shortly after that. And I certainly don’t condone it.
Whatever happened to the brilliant idea of automatic no-fault insurance for all, paid by an additional gas tax? Oh wait a minute…that was before the Prius and such came along. Still a good idea in principle, but like so many good ideas, it’ll never happen.
I feel your monthly pain.
Oregon’s making noises about charging hybrids and EVs a per-mile tax in lieu of gas taxes. Somebody even proposed putting a monitoring device in every car, fat chance that will fly with the public. The issue is how much tax per mile, and it opens a can of worms.
I’m all for paying my fair share, but balk at paying extra for an efficient car when studded tires go untaxed and the heavy trucks get away with far more road wear than they pay for.
Anyway the per-mile no-fault insurance for all idea is very sensible. It would cut lots of useless cost out of the system. Again, fat chance.
Now I think I’d better……
NC is making noises about shifting from an income tax based revenue system to taxes on consumption including some stuff like this. NC is interesting because it is a large state (8th maybe in population) but also very bipolar in living some areas are very urban and then all of a sudden very rural. 5 counties make up 60% of the population. They are thinking of changing the formulary for road money from a population by county to a # of miles driven. NC has been known as the “Good Roads State” so we generally have good roads (it helps that most areas of the state are in good climates) but some small counties have very nice roads while large counties struggle to keep them all paved. Some of the large municipalities are thinking about charging tolls for commuters who use the roads but are not supporting the tax base where they work and play. The urban areas in the rest of the country seem to have figured out how to capture that revenue (tolls going INTO NYC but not OUT) etc… It is a dilemma, what is fair.
Great graphic! The problem with the flat rate insurance is the same problem you raise with the mileage tax on the hybrid. Safe drivers will not want to pay the average rate that is bumped up by the roving vehicular disasters among us. I think that what is a “fair share” depends a lot on who you are asking.
I hear the complaints from the West side about studs, though somebody mentioned that the $50 million a year they talk about is pretty small compared to the billion they already spend for ODOT…
However, while studless tires work well in packed snow (I’m told), I have first hand experience with them on ice. One attempt at going up a steep hill in Klamath Falls on our siped winter tires, and a thrilling backwards slide turned me off the idea for good. For our three vehicles, we put studs on November first on two of them and park the third. On a really good day, we might get it out. This month has been mild, so the Forester is already on summer tires (those get 10% better mileage, so that’s a factor). We’ll keep the Chevy on studs until we’re pretty certain of no more sticking snow, maybe this weekend.
If you don’t need studs, don’t use them. Don’t condemn those of us who do.
The tax per mile also gets hairy when a lot of the back country roads around here aren’t maintained by any public entity. ‘Tis a mess.
I’m not condemning studded tires, in fact I once bought a set for the family Sable. I’m just saying if they’re going after hybrids and electrics for not paying their fair share of road maintenance costs, they should collect a little more on those studded tires too. They have to repave I-84 in Portland again this summer, that’s part of my daily commute, and I’m not looking forward to it.
I went looking for a photo, and guess where I found this one. Thanks, Paul!
Now I’ll duck back under the desk.
Im very luky and only pay $603 a year including two mill liability,collision, rental coverage and $500 dollar deductable. Im 34 and have paid the same amount since I was 25. Before the age of 25 I was paying 850 somthing per year and that included very basic get you on the road coverage. I have never been in an accident and have the highest driver rating atainable in Canada (five star I believe) . I do remember getting that first insurance quote on my 81 toyota tercel (in 95 early 96) and being a little discouraged at the $2700 quote for basic insurance.
Those inflation-adjusted numbers seem right – in 2003 I was paying about $1800 every six months for my ’89 Taurus wagon.
I was averaging about $700 per year in the Sable for the last couple of years. No collision, but I did get comprehensive.
Amazingly, my new Focus comes in at around $850 and change. One of the reasons I got it so low is because State Farm (with your permission of course) gets the odometer reading from Ford via Sync when you submit a vehicle health report. I just hope thats all the system can track…
Oh I forgot to mention that I have only ever recieved three speeding tickets and I disputed two of them and one was thrown out as the officer wouldnt be producing any evidence.
That reminds me, I need to take the collision off of my wagon. It was a good idea to add it when I bought it; it was only a year old. Now being seven years old with over 75K, it’s probably not worth keeping. My last two cars were several years old so liability and comprehensive were more than enough.
Insurance isn’t compulsory here in NZ, but I sure wish it was. I’m a high school teacher, and I’m appalled when I see one of my 15 year old retards buying a skyline to hoon around the local suburbs. Where I grew up in the UK no 17 year old could afford to insure anything over 1300cc, which probably made the roads a safer place to be.
I’m over 40, so insurance costs are low enough for me to not recall what hey are. When the renewal comes round I glance at it, have a moment of amusement at how low the payment is, and then let it just roll over.
Do you mean property or comprehensive insurance as opposed to 3rd party personal injury?
Something else that helps is being in the military, or having a dad in the military (like me). It gives you access to USAA insurance. I am a member thanks to my dad, and am lucky to have cheap insurance for the Philly area as a result at about $400 a month for a 2012 Altima and $350 for a Mazda 2.
Wow, you only pay $750 a month for 2 cars? Sounds like a bargain!
whoops – every 6 months…
Being an Engineer really helps me out, I get a group rate and my insurance costs are about 2/3 of most people I’ve talked to here in Ontario. Having fairly worthless cars helps too.
I see a problem looming this year when the DougD 63 Beetle returns to the road. My regular insurance company doesn’t do classics. Hagerty is available in Canada and it’s reasonable cost, but I dislike the usage restrictions and locked garage requirement.
Any ideas Canadian CC’rs?
Can I assume the liability insurance everyone is mentioning refers to personal injury and/or property damage?
Here we have compulsory 3rd party personal injury insurance, which is charged together with registration, about $550/yr. Then you may elect to take out your own insurance, usually 3rd party property or comprehensive insurance, there is also 3rd party, fire & theft (covering your own car for the latter two).
When in the air force out in California, I owned my avatar from June, 1970 to July, 1973. My insurance was high-risk – young single man, military – the worst of all worlds! My monthly premium for basic liability was $35.00!
Afterwards, your premiums were supposed to drop when turning 25. Not me. Industry-wide rates increased in 1976, and my insurance went UP a bit, even though my driving record was fine.
We still keep full coverage on our 11-year-old CR-V because wifey wants it that way.
So that’s why my insurance rates never lowered when I turned 25. (in 1977). Right now I’m paying $ 1200 a year for an 11 year old Cadillac, and 3 old cars with antique status, all full coverage. Without looking at the policy, I think I’m paying around $ 750 for the Caddy. Seems high for 11 years old.
The agent tells me I couldn’t get a better rate. I hate to change companies after 30+ years.
I too have USAA insurance and pay $120.00 per month in Albuquerque, NM for a 2003 Buick Regal and a 2005 Hyundai Sonata. That is for full coverage and both cars are running just fine, thanks.
I live in central MN and pay $205/month for a 2012 Camry and 2013 Outback plus my 2011 Jayco Tent Camper and renters insurance. I think that’s reasonable since we have more than minimum coverage and a low comp/coll deductible.
Live in the SF Bay Area(an expensive area) and pay $139/month for a 2009 Camry and 2012 Civic full coverage. We’re both over 40. It will come down as the cars age.
$300,000 limit is chump change unless the value of all your assets, plus anything your might inherit, and all of your future earnings is less than $300,000. You can get another $1,000,000 layer over your auto and homeowners for under $300. I did 30 plus years in the insurance industry. $1,000,000 limit gets the A team defense. Others don’t.