From 2006 to 2011, the number of drivers who opted to save money on their auto insurance by not buying collision and comprehensive coverage rose sequentially, especially for older vehicles. Those who did buy the coverage, chose higher deductibles, thus increasing their risk of severe economic hardship in the event of a catastrophic accident.
These findings were the result of a study conducted by Quality Planning with the goal of determining if the recession led consumers to assume more risk in the name of financial savings. Between 2006 and 2010, the average cost to insure a vehicle was $271 with newer models coming in at $913 and older cars at $528. (For the purposes of the study, “old” was defined as ten or more years.)
For newer models, collision and comprehensive policies continued to be purchased, most likely because banks and credit unions required the insurance as an aspect of financing. For older cars in the same time period, the number of drivers without collision or comprehensive coverage climbed from 53 percent to 63 percent, resulting in a savings of $19 per month or $229 a year.
All model years of cars trended toward higher deductibles, although the spike in sales in 2010 as a result of the “Cash for Clunkers” program skewed the findings for the year. The findings of the study are not surprising, since the average age of vehicles on American roadways is back up to 10 percent. With more drivers hanging on to their cars longer and the cost of repair exceeding the cost of replacement, older cars are more likely to be totaled, leading drivers to seek less expensive insurance avenues as their car ages.
