Insuring a Used car: Here are the Best car Insurance Companies to Compare

Some of the best auto insurance companies for a used car are the same insurers that you’d go to for your new vehicle. Unless you’re considered a high-risk driver, you may be able to get cheaper insurance with a depreciated used car. If you’re still unhappy with the cost, consider insurance company discounts to lower your car insurance rates.

If you’re looking for the rates for the best auto insurance companies for a used car, enter your ZIP code into our free quote tool to see what you could save on a policy today.

Which auto insurance companies are best for used cars?

Used cars aren’t always cheaper to insure than new cars, and your rates will heavily depend on other factors. Some insurers give more affordable rates to older cars. Your auto insurance rate will largely depend your past driving habits or if you’re considered a high-risk driver, which would cause the insurer to pay out on a claim.

Many insurers will be happy to offer auto insurance for used cars, but each company may differ in quality and what it offers. Some of the most popular insurance companies include:

• USAA – Affordable auto insurance for military families and veterans
• State Farm – Easy claims process. Affordable for non-military customers
• Geico – Affordable policies. High customer satisfaction
• Nationwide – Strong across the board. Competitive rates for drivers with poor credit

There are many other insurance companies that can insure your used car. Determining which company is the best for you requires researching multiple companies and evaluation.

How can I tell if an insurance company is a good fit for me?

If you’re not sure if a potential insurer is a good fit, there are a few ways you can check their quality. Some insurers shine in one area while ignoring others, so you should consider multiple companies. For instance, an insurer might have the financial assets to pay out on your policy, but that doesn’t mean much if you can’t get in touch with customer service to file a claim.

Some of the factors to research when you consider an insurer include:

• Financial assets – You will want your insurer to be able to pay for repairs to your vehicle.
• Customer service – The Better Business Bureau offers accreditation to businesses that meet its standards. Customers can trust the insurance company to be ethical.
• Policy options – You should know what type of coverage you need before you look for an insurer. Don’t get stuck with something you don’t need.

An insurer that doesn’t have the financial assets or respect for customers will end up being more of a hassle for you than it’s worth. Researching something as important as your insurance company ahead of time can help you handle your claims quickly if necessary.

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What are the different types of insurance for used cars?

Several auto insurance coverage types benefit different needs in your vehicle. Some of these policy types are better suited for used cars, as they’re more likely to suffer wear and tear or mechanical damage than a new vehicle.

The main types of auto insurance that most car owners can benefit from include:

• Liability – Covers damages and injury when you are at fault
• Collision – Covers any damages to your car when you collide with another car or object
• Comprehensive – Covers any non-moving damages from things such as weather, theft, or vandalism

These are just a few auto insurance products on the market, but they also serve most insurance needs that people have. Extra coverage is available at an additional cost.

What is mechanical breakdown insurance for used cars?

Mechanical insurance for used cars can be helpful when something within your vehicle stops working due to wear and tear. Mechanical breakdown insurance (MBI) is an optional coverage meant to cover trips to a mechanic for things that aren’t caused by a collision or weather accident.

MBI insurance can cover things in your vehicle like a fried wire or puncture that just occurred due to the natural use of your vehicle. Mechanical breakdowns of your engine can have a huge cost, so having a quality MBI insurance plan might save you more in the long run.

What is gap insurance for used cars?

Another optional type of auto insurance, gap insurance is meant to help you pay off a loan when your car is totaled. Nothing would be worse than having to pay off a car you no longer have, so gap insurance can help cover the difference in what you have left. With that off your plate, you’ll be able to focus on getting a new ride as soon as you can.

What is maintenance insurance for used cars?

Maintenance insurance is similar to MBI, except this insurance type covers the internal electrical systems and computers. If your sensors are off or you’re having issues with your battery, a maintenance insurance policy might be able to help you pay for the mechanic’s service in figuring it out and fixing it.

You may be able to bundle some used car insurance for repairs with other insurance products, so it may be worth asking your insurer if they can provide any deals.

What does used-auto insurance cost?

According to the National Association of Insurance Commissioners, the average cost was $1,190 a year to insure a used vehicle in 2018. This was a 20% increase from 2017. This average cost does not include extra coverage options like MBI or maintenance insurance.

Is insurance cheaper for used cars?

In some cases, you may find that auto insurance rates for used cars are more affordable. This discount is because their value has depreciated. Since an insurer considers a car’s value and what it’ll have to pay out, you can save by driving an used vehicle.

What is auto insurance underwriting?

Auto insurance underwriting is the process where an insurer tries to determine the risk they face in giving you an auto insurance policy. As a business, an insurer needs to make sure it can make a profit before giving you a policy. So the insurance company assigns an underwriter who will look at various risk factors in your life.

Some of the things the auto insurance underwriter will consider include:

• Driving record – If you have any tickets or recent claims, you’ll have to pay more to cover the risk it will happen again.
• Credit history – Not being current on bills can also stand out as a red flag to your insurer.
• Your vehicle – Any lack of safety features will cost you more, while you may be able to get discounts if you have safety or anti-theft systems.

While not as in-depth as life insurance, your auto insurer will still need you to be honest about your driving record and credit history. Lying on an auto insurance application is considered fraud.

How can I get lower auto insurance for a used car?

If your auto insurance rates are getting too expensive, you may be able to save if you’re willing to do the work. Since an insurer bases their rates on risk, you should start by lowering any chance of being in an accident. Reducing your risk by:

• Shopping around at multiple insurers. Consider switching to a cheaper insurer
• Increasing your deductible, which decreases what your insurer pays and lowers your premiums
• Improving your driving record by practicing defensive driving

Auto insurance companies compete against each other to attract and retain customers, so you’re bound to find a better deals. But it may take some time to let past infractions on your record expire before an insurer is willing to lower your rates.

How long are you considered a high-risk driver?

If you’re auto insurance company considers you a high-risk driver, you’ve already seen the consequences of this designation. Not only will your auto insurance rates be higher, but you may also have a more challenging time finding vehicle insurance quotes from some insurers.

The high-risk designation won’t last forever and will be automatically dismissed in three to five years, on average. You may be able to get a discount on your rate if you successfully complete a defensive-driving course.

What are popular auto insurance discounts?

As previously mentioned, car insurance companies are private businesses in constant competition with each other. Insurers implement all sorts of strategies to get a larger share of the market, and discounts are a big part of that. Auto insurance companies have created a variety of discounts, including:

• Accident-free – If you’ve gone without an accident for three to five years, you can get savings on your policy
• Safe driver – By practicing defensive driving and using safety features in your vehicle, you can get 10% off your rates from some insurers
• Low usage – If you limit the use of your car, you can get a discount to cover the lowered risk of it not being driven as much
• Senior, Good Student, and Military – Depending on your occupation and age, some insurers are willing to give you a discount. For example, some insurers offer discounts to full-time students with proof of at least a B average

As with all deals, you should ask your insurance agent how to save each month on your auto insurance. Each insurer will offer different discounts.

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Insuring a Used Car: The Bottom Line

While obtaining insurance for a used car can be stressful, you can get coverage quickly. There are many auto insurance options for used vehicles, and you may be able to save depending on the car’s value, your age, and your driving habits. If your insurance rates are too high, you could consider lowering your risk or applying for discounts at many participating insurers.

Now that you know how to find quotes for the best auto insurance companies for a used car, enter your ZIP code into our free quote tool to see some competitive rates.

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