Vintage Cars: Insurance Costs Explained

Classic cars, including those manufactured in the 1970s, are typically insured separately from regular-use vehicles. This is because classic cars tend to appreciate in value over time, whereas regular-use vehicles depreciate.

Insurance rates for classic cars vary depending on the vehicle's value, age, type, and use. For example, a 1970 MG B with an agreed value policy of $5,000 would have an annual premium of $112.

While insurance rates for classic cars are generally lower than those for standard vehicles, classic car policies often come with restrictions. These may include limits on mileage, storage requirements, and restrictions on who can drive the vehicle.

In recent years, auto insurance rates have been increasing, with some sources claiming that rates are 26% higher in 2024 than in 2023. The largest annual increase since 1979 was reported by Bank of America in May 2024, with a 22.6% rise in motor vehicle insurance costs.

Classic car insurance policies

When it comes to pricing, classic car insurance rates can vary depending on the value, age, type, and vehicle use. However, classic car insurance policies are often more affordable than standard auto insurance policies, as they are designed for vehicles that are not driven daily and are typically stored in secure locations. Overall, classic car insurance provides specialized coverage for collectible vehicles, ensuring that they are protected and maintained for years to come.

Insurance for vehicles with safety equipment

Classic cars, generally manufactured over 25 years ago, are often insured separately from regular-use vehicles. This is because classic cars tend to appreciate in value over time, whereas regular-use vehicles depreciate. Classic car insurance policies are usually written on an "agreed value" basis, meaning the owner will receive the full value of the car if it is lost or stolen.

Classic car insurance rates can vary depending on the value, age, type, and use of the vehicle. Some insurers, like Grundy, offer unlimited miles for pleasure driving and collector car-oriented activities. Other insurers, like Heacock, offer annual mileage options of 1,000, 3,000, or 6,000 miles. Classic car insurance policies may also include restrictions on who can drive the vehicle and how it is stored.

When it comes to safety equipment, some insurance companies do offer discounts for certain features. However, the safety features that usually qualify for discounts are those that have been around for decades, such as anti-lock brakes, airbags, daytime running lights, and automatic seat belts. Here are some examples of how safety equipment can impact insurance rates:

• Anti-lock brakes: Allstate offers a 10% discount, while 21st Century Insurance offers a 5% discount. Florida, New Jersey, and New York require insurers to give a discount for anti-lock brakes.
• Airbags: Geico offers up to a 25% discount for driver-side airbags and up to a 40% discount for full front-seat airbags on medical payments or personal injury protection coverage.
• Daytime running lights: Some insurers, like Geico, offer a small discount (e.g., 1% off certain coverage) for this feature.
• Electronic stability control: This feature has been required on all cars, SUVs, pickups, and minivans since the 2012 model year. Insurers that offer a discount for electronic stability control typically apply it to collision coverage.
• Automatic seat belts: Many insurers still give the same discount for automatic seat belts as they do for airbags.

It's important to note that the availability and amount of discounts for safety features can vary by insurance company and state. Additionally, newer safety technologies may not always result in significant savings on insurance rates. For example, a study by The Zebra found that out of nine safety technologies, only electronic stability control (ESC) lowered car insurance rates, and the average savings was only about $7 per year.

Insurance for older drivers

The cost of car insurance usually decreases as you get older, as older drivers are deemed to be lower-risk by insurers. This is because older drivers are less likely to make claims. However, this trend reverses at some point, with premiums generally starting to rise again for drivers in their 70s and those turning 80. This is due to statistics showing that drivers in this age bracket are more likely to be involved in accidents and make claims.

Factors Affecting Insurance Premiums for Older Drivers

There are several factors that can influence the cost of car insurance for older drivers:

• Age: Premiums tend to increase when drivers reach their 80s due to a higher likelihood of accidents and more expensive claims.
• Mileage: Older drivers who only drive occasionally and no longer commute are considered lower-risk and can benefit from lower premiums. Limited mileage policies are available for those who drive fewer miles per year.
• Vehicle type: Switching to a smaller, less powerful, and more practical car can result in lower insurance costs. Older cars may also be cheaper to insure due to their lower value, but the lack of modern safety features may be seen as a higher risk by insurers.
• Security: Installing approved alarms, immobilisers, and trackers can help reduce insurance costs.
• Payment method: Paying the premium annually, rather than monthly, is usually cheaper.
• Voluntary excess: Increasing the voluntary excess can lower the premium, but it's important to ensure the chosen excess amount remains affordable.
• Telematics: Opting for a telematics policy, which uses a "black box" to monitor driving patterns, can help prove that an older driver is generally safe, potentially leading to reduced premiums.

Specialist Insurance for Older Drivers

Some insurance providers specialise in offering cover to older drivers, such as RIAS, Age UK, and Saga. These providers typically include additional features as standard that may be particularly useful for older drivers, including:

• Protected no-claims discount (NCD)
• Onward journey cover, providing transport if the insured vehicle cannot be driven due to an accident
• Emergency 'any driver' cover, allowing other drivers to get the insured vehicle home in case of a medical emergency
• Guaranteed courtesy car while the insured vehicle is being repaired
• Breakdown cover

Classic Car Insurance

If an older driver owns a classic car, they may need to consider a specialist insurance policy. A classic car is typically defined as a vehicle that is over 25 to 30 years old, depending on the insurer. Classic car insurance policies differ from standard policies in terms of eligibility, usage restrictions, and how losses are settled after an accident or theft.

Classic car insurance policies are often based on an "agreed value" rather than the "actual cash value," ensuring the owner receives the full value of the vehicle if it is lost or stolen. However, these policies usually come with restrictions on annual mileage, storage requirements, and driver eligibility.

Insurance for younger drivers

The reason for this is that insurance providers consider younger drivers to be higher-risk. Data shows that younger, inexperienced drivers are more likely to be involved in serious accidents. In the US, car crashes are the leading cause of death among teens, according to the Centers for Disease Control and Prevention (CDC). The risk for crashes is highest during the first few months of a teen having their driver's license, and drivers between the ages of 16 and 19 are more likely to get into a car crash than any other age group.

However, there are ways to lower insurance costs for younger drivers. One way is to add a teen to an existing policy, which is typically less expensive than a young driver buying their own coverage. Staying on a parent's policy can also help to reduce the cost of coverage for young adults. Another way to lower insurance costs is to take advantage of discounts. Many insurance providers offer discounts for good students, students who are away at school, driver's education, defensive driving courses, safe driving, multi-car policies, multi-policies, and safety features.

When it comes to choosing an insurance provider, it's worth considering companies that offer good programs for young drivers. Here are some options:

• Liberty Mutual: Offers multiple discounts for young drivers, including a teen driving program discount, a good student discount, a new teen driver discount, and a distant student discount.
• State Farm: Offers usage-based insurance options and considerable discounts for students in good academic standing.
• USAA: Offers lower-than-average rates and insurance designed for active-duty military, veterans, and their families.
• Geico: Offers competitively low rates and almost 20 different discount opportunities.
• Erie Insurance: Offers a young driver discount, car safety equipment discounts, and reduced usage discounts.

Insurance for vehicles with anti-theft systems

While classic cars can be cheaper to insure than standard vehicles, they often come with restrictions. These can include limits on how many miles you can drive per year, how the car is stored, and who can drive the vehicle.

Classic car insurance policies also differ from standard policies in how a loss is settled after an accident or theft. Classic car insurance policies are usually written on an "agreed value" basis, meaning the owner will receive the full value of the car if it is lost or stolen.

When it comes to insurance for vehicles with anti-theft systems, there are several options available that can help protect your car and lower your premiums. Many insurance companies offer discounts to policyholders with anti-theft devices installed, as these help insurers save on coverage costs. Here are some of the most common types of anti-theft devices:

• GPS trackers: These devices allow you to track your car's location from your smartphone and can send alerts when your vehicle is in motion. More advanced GPS trackers can also immobilize your vehicle when someone tries to steal it.
• Vehicle recovery systems: These systems use radio frequency technology to help law enforcement locate and recover your stolen vehicle.
• Hidden kill switches: These cut the electricity flow at the ignition switch, preventing thieves from driving away with your car.
• Brake locks: Attached to the brake pedal or steering wheel, these devices immobilize your brakes, making it impossible for robbers to move your car.
• Steering wheel locks: These locks immobilize your steering wheel, making it difficult for robbers to drive the car.
• Subscription services: Services like OnStar can prevent your vehicle's engine from starting when you report a theft, but they typically require a monthly fee.
• Audible alarm systems: These systems sound a loud alarm when someone touches your vehicle, attracting attention and deterring thieves.
• Remote locks: Connecting to your smartphone, these locks allow you to secure your vehicle remotely, even if you forget to lock it manually.
• Smart keys: These use a radio pulse generator to communicate with antennas inside the vehicle, sending a different signal each time and making it difficult for thieves to crack the lock mechanism.

It's important to note that the availability and amount of anti-theft vehicle insurance discounts can vary across insurance companies and states. Some insurers may restrict discounts to specific types of anti-theft devices or require proof of installation before granting the discount. Therefore, it's advisable to compare different insurers' offerings and pick the most affordable and suitable policy for your needs.

Frequently asked questions