Worth keeping collision and comprehensive insurance on old car?

In My Humble Opinion
1

One of my vehicles is a 1997 minivan with 70,000 miles and in very good shape. Too good not to keep until it collapses. Trade-in value is around $4,000.

My total annual collision and comprehensive premiums come to $356. each has $500 deductible. Is it worth keeping that coverage for a car of that little value?

Seems to me I once read that there is a formula to determine if it is worth it. Something like if the premiums are more than 10 percent of the value, should drop it.

Anybody have any ideas on whether I should keep or drop this coverage (obviously will keep the Liability, uninsured motorists, and required items)?

2

A rule of thumb that’s always made sense to me is that insurance coverage is indicated when:

  • bearing the cost of a loss would be financially devastating and/or
  • your chance of a loss is meaningfully greater than average

In the case you describe, it seems likely that #1 isn’t applicable. You would have to evaluate #2.

FWIW, I never carry comprehensive or collision coverage. I don’t tend to own fancy cars, and I have a good driving record (never an at-fault claim). So I’m way ahead at this point.