Do I need collision insurance on an old car?

Your car gets you everywhere you need to be. It may be getting older, but it runs well. It’s reliable and has become to reflect a bit of your personality and style.

But as the vehicle ages, does it make sense to continue buying complete auto insurance coverage including collision and comprehensive coverage

You’re not the only one to ask if you need collision insurance on an old car, so here’s what you need to know.

What insurance am I required to have?

Under Ontario law, every vehicle needs to maintain at least the following insurance:

  • $200,000 in third-party liability coverage: this pays for any damage for which you are responsible to people or property. $1 million or more is strongly recommended.
  • Statutory Accident Benefits coverage: this pays for your or a passenger’s medical bills plus a bit of lost income while you recuperate from the accident.
  • Uninsured/underinsured coverage: it covers you in the event you are struck by a vehicle without insurance or a hit-and-run.
  • Direct compensation property damage insurance: this pays to repair your car if you are hit by another vehicle inside the province and if the other driver is both at fault and insured in Ontario.

All other insurance coverage types are optional, including collision coverage, which pays you when you are in an at-fault accident and damage your own vehicle.

Comprehensive coverage is also optional, which includes damage caused by perils other than collision, such as theft, falling objects and vandalism. This is probably one you can pass up for older vehicles.

Leasing and loan agreements may require it

We’ve assumed that you’re asking about collision and comprehensive coverage for a car that you own up to this point, but not everyone owns their vehicles.

If you’ve leased your car, then it’s worth noting that your lease agreement may include mandatory comprehensive and collision coverage. Similarly, loan agreements on new or high-end vehicles may require that you buy extended coverage.

Read those agreements carefully before taking your car on the road!

Does collision coverage make sense for an older car?

There are two main factors that will help you decide if you need collision coverage for your old car:

What is the value of the car minus insurance costs?

The insurance company will place a value on your vehicle when you get a quote. Take this value and subtract any deductible you would have to pay in the event of a claim. Then reduce this amount by your insurance premium.

This total should prepare you for the second part of this decision, but it will probably become clear when you add up the costs of collision insurance against your vehicle.

Most people drive older cars to save money. It might not make sense to over-insure a vehicle if you aren’t going to put money into another major repair.

What can you afford?

Depending on the value you calculated above, you should imagine what would happen if you were in an accident and your car was irreparable.

If your financial situation is such that you could afford to go out and buy another vehicle, you may want to consider reducing your policy premium by eliminating one or more of the optional coverage types, such as collision or comprehensive.

If replacing your car entirely out of pocket isn’t feasible, then you may find that the security of collision or comprehensive insurance is important, especially if you can spread those payments over the course of the year. It could insulate you from expensive repairs that come out of left field.

This is how to decide if you need collision insurance on an old car. It comes down to understanding the value of your vehicle and your ability to replace it.


You can always check out the cost of those optional coverage types in our 3-minute quote process, or just give us a ring for our thoughts on the matter.

Stay safe and stay insured out there!

Your car gets you everywhere you need to be. It may be getting older, but it runs well. It’s reliable and has become to reflect a bit of your personality and style.

But as the vehicle ages, does it make sense to continue buying complete auto insurance coverage including collision and comprehensive coverage

You’re not the only one to ask if you need collision insurance on an old car, so here’s what you need to know.

What insurance am I required to have?

Under Ontario law, every vehicle needs to maintain at least the following insurance:

  • Statutory Accident Benefits coverage: this pays for your or a passenger’s medical bills plus a bit of lost income while you recuperate from the accident.
  • Uninsured/underinsured coverage: it covers you in the event you are struck by a vehicle without insurance or a hit-and-run.
  • Direct compensation property damage insurance: this pays to repair your car if you are hit by another vehicle inside the province and if the other driver is both at fault and insured in Ontario.

All other insurance coverage types are optional, including collision coverage, which pays you when you are in an at-fault accident and damage your own vehicle.

Comprehensive coverage is also optional, which includes damage caused by perils other than collision, such as theft, falling objects and vandalism. This is probably one you can pass up for older vehicles.

Leasing and loan agreements may require it

We’ve assumed that you’re asking about collision and comprehensive coverage for a car that you own up to this point, but not everyone owns their vehicles.

If you’ve leased your car, then it’s worth noting that your lease agreement may include mandatory comprehensive and collision coverage. Similarly, loan agreements on new or high-end vehicles may require that you buy extended coverage.

Read those agreements carefully before taking your car on the road!

Does collision coverage make sense for an older car?

There are two main factors that will help you decide if you need collision coverage for your old car:

What is the value of the car minus insurance costs?

The insurance company will place a value on your vehicle when you get a quote. Take this value and subtract any deductible you would have to pay in the event of a claim. Then reduce this amount by your insurance premium.

This total should prepare you for the second part of this decision, but it will probably become clear when you add up the costs of collision insurance against your vehicle.

Most people drive older cars to save money. It might not make sense to over-insure a vehicle if you aren’t going to put money into another major repair.

What can you afford?

Depending on the value you calculated above, you should imagine what would happen if you were in an accident and your car was irreparable.

If your financial situation is such that you could afford to go out and buy another vehicle, you may want to consider reducing your policy premium by eliminating one or more of the optional coverage types, such as collision or comprehensive.

If replacing your car entirely out of pocket isn’t feasible, then you may find that the security of collision or comprehensive insurance is important, especially if you can spread those payments over the course of the year. It could insulate you from expensive repairs that come out of left field.

This is how to decide if you need collision insurance on an old car. It comes down to understanding the value of your vehicle and your ability to replace it.


You can always check out the cost of those optional coverage types in our 3-minute quote process, or just give us a ring for our thoughts on the matter.

Stay safe and stay insured out there!

Seriously, what else can you do in 3 minutes?

Boil half an egg?

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