Wanting to switch from a big SUV to small car, but.........HELP!

[fa]

I have a large expensive SUV that is an older vehicle.  I am considering selling it to buy a used MMM approved used small vehicle.  Currently, the value of the SUV is a couple of thousand $ higher than the newer smaller vehicle.

I called my insurance company before making a final decision.  My comprehensive insurance premium would actually go UP instead of down, by about $400 per year.  Since the newer vehicle is worth less and is smaller, I cannot understand this.  The premium should be lower.  I asked for an explanation and they said that it was becaue the smaller vehicle is newer.  This makes the savings of switching much smaller than I thought.

Does anyone have a solution?  Does it still make sense to proceed with the transaction?  I have the hassle of selling my older car, pay sales tax and registration fees on the smaller car, and my net savings in gasoline per year are maybe $500 after taking the insurance increase into account.  Would you do it in this particular situation?

[dandarc]

Try another insurer.  Or buy an older vehicle, and unlock even more of the dollars you have locked up in the SUV.

[La Bibliotecaria Feroz]

I agree--buy an older small car. Then you won't need comprehensive insurance at all! You're comparing apples to oranges here.

[okashira]

You don't need or want comprehensive AT ALL. If you do, your car is too expensive. Problem solved. Next.
How much shopping around did you do? Did you just call your insurance provider, or 5 others like you should have? ;-)

[Left]

how old is the old suv? if it's so old that it's not worth much, the premium is lower, and new cars needing to be replaced if totaled cost more so premiums are higher maybe? im not in insurance so i'm just guessing

but would you get better mpg? that may make the cost to drive it worth more than premium

[fa]

Anyone have suggestions as far as insurance company is concerned?  We have been with ours for 20 years, so we have been out of the market for a while.

The old SUV is 10 years old and worth about $17,000.  The car has comprehensive insurance because of teenagers.  Without them I would not get comprehensive.

[daverobev]

Geico are good I think.

Small cars can be more expensive because the cool kids drive them (badly), and they are at more risk of being stolen. Insurance is about measurable stats, not 'logic'.

[Rezdent]

For insurance, consider raising the deductible as high as you can comfortably cover.  That will lower costs if you really want the comprehensive.  Once I reached a point where I could replace a vehicle with savings then I dropped the comprehensive.
I switched to a used Honda Fit last month when my 14 year old SUV was totalled.  The other driver was at fault and covered the "replacement value".

Gas went way down.  But there are other costs that I hadn't considered that also went down, like the cost of:
Oil
Filters
Tires
Wiper blades.
So it's not just gas savings - although that's a biggie.

[lpep]

I was paying $89/month for my '08 Focus with State Farm.

Now I'm paying about $43/month with Geico. (Full disclosure: I went from daily commuter usage to pleasure usage, but even that would have been $85/month with State Farm).

Call around.

[Happyback]

I recently did this!  I have Country Companies Ins, and I don't pay for comprehension, because I paid cash for the car, so they can't require me to do that.

The advantages are more than just financial.  I love my smaller car. I have 7 kids, so I have had a Suburban for years!  I switched to a VW TDI (diesel--clean, quiet, new diesel), and have ZERO regrets!  I get great gas mileage, my insurance is about the same, but I find that I spend nothing on repairs, the maintenance is less, and I love having a smaller car that can park anywhere!  LOVE MY CAR!

I recommend looking at different car insurance companies.  Seriously.  And check your numbers...do you need Comp?  If so, why? And check your limits. The law requires $25K/$50K here in Oregon.  I carry a little better than that. But, sometimes ins companies quote you at the $50K/100K limits.  Don't let that happen.  ;)

Good luck!

[Heather in Ottawa]

I went from an '09 Jeep Wrangler gas guzzler to a new 2014 Fit. Same insurance (with Desjardins), but added collision (another $74 per year) and new car depreciation ($15 per yer for first 3 years). So $400 for you sounds pretty excessive to me, considering that Ontario where I'm located is a relatively expensive insurance market. I have a $1000 deductible, and a 20% discount for using telematics (a GPS device that plugs in). Monthly insurance cost is about $52. Key-for-key swap, and now I have a new paid-for car that I plan to treat with Krown rustproofing every few years (the vast majority of our driving happens in winter), and hope to keep for 15-20 years. This car actually meets all my needs, without exceeding them. So worth it for the efficiency gains! Very happy.

Also, our Jeep was worth slightly as a trade-in than we were willing to pay for the Fit, but we used that to bargain for some winter tires and rims.

[daverobev]

I went from an '09 Jeep Wrangler gas guzzler to a new 2014 Fit. Same insurance (with Desjardins), but added collision (another $74 per year) and new car depreciation ($15 per yer for first 3 years). So $400 for you sounds pretty excessive to me, considering that Ontario where I'm located is a relatively expensive insurance market. I have a $1000 deductible, and a 20% discount for using telematics (a GPS device that plugs in). Monthly insurance cost is about $52. Key-for-key swap, and now I have a new paid-for car that I plan to treat with Krown rustproofing every few years (the vast majority of our driving happens in winter), and hope to keep for 15-20 years. This car actually meets all my needs, without exceeding them. So worth it for the efficiency gains! Very happy.

Also, our Jeep was worth slightly as a trade-in than we were willing to pay for the Fit, but we used that to bargain for some winter tires and rims.

Every few years? Few is (IIRC) a number between 1 and 5. KROWN recommend 18 months I think. I'd probably do it every year, but happy not to bother doing that if there is good support for every 2-3 years being enough?

[Amy]

It is all about the stats. Your older SUV was cheaper to insure than the ONE small car you asked about. Ask about others.

I sold my 1996 Mazda Protege and bought a 2005 Pontiac Vibe and my insurance went DOWN by $75 every 6 months. (Same company, same coverage, no comprehensive on either car.)

I asked the representative why. She said that '96 Proteges get in more accidents than '05 Vibes. I can only assume that the drivers are a different demographic. The '96 cannot possibly cost more to fix or replace.

[Cwadda]

Throwing out my own insurance stats.
'07 Mazda3 worth $8000.
Insurance is $69/month and I am under my family's coverage
The provider is Safeco

The old SUV is 10 years old and worth about $17,000.  The car has comprehensive insurance because of teenagers.  Without them I would not get comprehensive.

Hmm...I feel like you get a good smaller car for half of that.

[jzb11]

Try progressive, they've been consistently cheaper than all other insurances companies I've been quoted by (state farm, geico, AAA)

[neo von retorch]

State Farm is usually my best bet among "big name" insurers, but I have Donegal and pay less than $500 total per year for a 2008 Honda Fit with collision and comprehensive. (Back in 2007, I went from a 1999 Tahoe to a 2007 Honda Fit. Awesome! Insurance cost was about the same for me...)

[PloddingInsight]

The car has comprehensive insurance because of teenagers.  Without them I would not get comprehensive.

Do you mean collision coverage?  I have trouble imagining how teenagers make you need comprehensive coverage on your car.

[Iron Mike Sharpe]

I need to put on my To Do List to do an insurance review.  I basically have just been using the insurance agent my parents have had, so I have no idea if I have a good rate or not.  But I need to review what coverage I actually have vs what I need and then shop it around.

All I know right now is what I'm paying:

Auto:  2012 Nissan Versa (fully paid off, subcompact car):  $68/month

House:  1250 sq ft townhouse (purchased for $114,000):  $123.50/month

[neo von retorch]

Wow, so just to break down my insurance to monthly, I pay...

$40.83 / month for auto (2008 Honda Fit, full coverage)
$25.92 / month for home (1994 - single family 1300 sq ft $156k)

Shop around!

[Iron Mike Sharpe]

Will do.  Thanks!

[fa]

My teenagers (2) add some $2,100 per year to the policy to cover 2 vehicles.  It is interesting to see so many people talk about the Honda Fit, because that is the car I am looking at.  I found one with 4,500 miles for $14,000, manual.  The car is 6 months old.  The majority of the factory warranty is still on it.  It seems like a good deal to me because of the many miles we drive.  My fuel consumption would be cut in half, but I was also expecting insurance to go down.

I checked with Geico, and they are between $600 and $1,000 less than my current policy.  Thanks for all the feedback.

[neo von retorch]

That looks like a sweet deal to me. Around here, a 3-4 year old Fit with 30k+ will still have an asking price near $15k... (Of course, you can still probably negotiate it a little lower.)

[greaper007]

I have a large expensive SUV that is an older vehicle.  I am considering selling it to buy a used MMM approved used small vehicle.  Currently, the value of the SUV is a couple of thousand $ higher than the newer smaller vehicle.

I called my insurance company before making a final decision.  My comprehensive insurance premium would actually go UP instead of down, by about $400 per year.  Since the newer vehicle is worth less and is smaller, I cannot understand this.  The premium should be lower.  I asked for an explanation and they said that it was becaue the smaller vehicle is newer.  This makes the savings of switching much smaller than I thought.

Does anyone have a solution?  Does it still make sense to proceed with the transaction?  I have the hassle of selling my older car, pay sales tax and registration fees on the smaller car, and my net savings in gasoline per year are maybe $500 after taking the insurance increase into account.  Would you do it in this particular situation?

What are the two different cars?    Is the smaller car something that is often modded by the "rice burner" community?   

[DollarBill]

I went from a 2005 Explorer to a 2012 focus and the insurance is $3 cheaper, plus I save about $100 bucks a month on gas.

[fa]

The smaller car is a Honda Fit.  What is the rice burner community?

[greaper007]

The smaller car is a Honda Fit.  What is the rice burner community?

Hmm, surprising.    I meant the guys that like to put fart can exhausts on Civics and lots of lights and things that go "boom, boom, boom" when they play their EDM (electronic dance music, the greatest scourge on music since disco).     The higher price on the Fit might be because of the poor crash test ratings, because I haven't seen a lot of young male attention for the model.

Have you looked at other models or maybe something slightly larger?    If you go with European makers there are lots of options for wagons.    They're more expensive but if you're willing to buy 2-4 years old it's probably a similar price as a new Fit.     Something like a Volvo is also miles safer.

[skunkfunk]

Do not let your teenagers drive a $15,000 car. If the MUST have a car, get a beater that they can learn to work on.

I mean, what else are teenagers going to do in their free time? Something much less useful than learning a car, I can tell you that much.

[Heather in Ottawa]

To answer the question about Krown, the company says that every 2 years is sufficient (if you aren't trying to be covered by their warranty). I divide that by my skepticism that someone who is trying to sell me a service will actually recommend that it be done as infrequently as it reasonably could be done, then divide again by how many miles I drive compared to a normal person, and consider that I actually keep my car in the garage... Hmmm, maybe once every 10 years would be plenty! But, for the small cost, I'm happy to do it every 4 years. Not necessarily going for perfection, just that the car will die of a cause other than rust.

Watching how quickly my winter bikes can turn into a pile of rust is a great object lesson in the importance of oil for rust proofing.