car insurance

[momo5]

at what point does it make sense to drop collision on your vehicle?

[MDM]

You can put your exact question into Google and get a large number of links that, at first glance, seem not unreasonable.

Know that, statistically, you will lose money on any insurance.  Why can you know that?  Because the insurance companies are still in business, taking more money in premiums than they spend on claims.  But see the various links Google finds, and consider any hidden agenda might be involved in each.

[Paul der Krake]

I personally think the sweet spot is somewhere between 4 to 6k. This is coming from a houshold that is far from FI (and hence not so willing to lose a 10k car in the event of a wreck), with one "only okay" driver.

The answer to your question should be whatever makes you sleep soundly at night.

[homehandymum]

For us, it was when we were able to buy a replacement outright using 2 or 4 pay-packets worth of savings.

So, we can save just under $1k per pay period, so I was ok dropping Collision cover on the car that was only worth $4k, but I've kept it for the minivan, which would be about $12k to replace.

Basically I just asked myself if I was comfortable sucking up the replacement cost.  YMMV

[soccerluvof4]

I agree it comes down more to economics and what your comfortable with as a replacement cost. For me 8k right now would be the comfort zone.

[mh1361]

FWIW, I don't have collision because my car is only worth about 1k and I have enough saved to buy a car should I lose this one. I do however have comprehensive since it's only $6.67 for 6 months.

[Spork]

I've stated this in a number of threads so it may sound repetitive.  My opinion is: if you cannot afford to pay cash for the car, wreck it and buy the same car again -- you can't afford the car.*

If you can afford to pay cash for a pristine restored 1962 AC Cobra, wreck it and can afford another (and still sleep at night).  Go for it.  Otherwise, you might want to downgrade.

IMO: if  you need full coverage, you probably bought more car than you can afford.


*as always, I seem to have to mention: If you worked out some awesome deal with awesome financing that is "cheaper than cash" -- that's beside the point.  You need to be able to afford to pay cash, whether you do it or not.  And don't forget to roll the price of full coverage into this -- because you'll HAVE to have it if you finance.

[Milspecstache]

I wouldn't base it entirely on value...

For instance a larger, older vehicle might be easier to repair/less likely to get heavily damaged, therefore able to drop collision sooner.

A car that is more likely to be stolen and in an area where it is more likely would require collision longer.

To me, insurance is all about spending money to ensure I don't lose something that is un-replaceable.  If I have a car/phone/house/etc that is easily replaceable then I am better off financially to self-insure.