If you’re like most people, you walk out in the garage every day, get in your car, put the key in the ignition, and if the engine turns over, that’s the last thought you give to your vehicle. When’s the last time you thought about is birthday? No. I’m not suggesting you bake a cake for your Civic. Americans are holding on to their cars longer than ever, about 5.3 years now, meaning that there are many cars on the road today that are not worth what it would take to repair them.
Now, don’t get your back up. Your five-year-old Odyssey may be in great shape. Mine is. But if something happened, by the time you run up parts and labor, to the insurance company, totaling your car is likely the cheapest way out. If that’s the case, why are you paying for collision coverage on your older vehicle? If you drop that aspect of your auto coverage, you could well save 30-40%. Given the fact that experts are in agreement that after five years of falling rates, auto insurance premiums are headed back up, pondering the age of your car against what it costs to insure it makes good sense.
People are holding on to their cars for one simple, hard reason. They can’t afford car payments. Given that. Why pay one penny more in auto insurance than you have to? You might also ask your insurer about pay-as-you-drive options or other low mileage discounts. Not only are we holding on to our cars longer, we’re being more careful with them. Driving less to make them last.
All of these factors and others that come to bear on the cost of auto coverage are clearly linked to the recession. The success of the retail climate during December 2010 would seem to indicate there’s positive movement in the economic sector, but unemployment remains high and even the president says he’s not prepared to say this recovery is self-sustaining. Most everyone is staying in a penny wise frame of mind and a good place to star counting pennies may be the aging vehicle sitting in your garage.