Is it unnecessary to buy car damage insurance after a few years?
4 Answers
Whether it is necessary to purchase car damage insurance depends on the model of the vehicle and the financial situation of the owner. Generally, private cars over 8 years old are not very suitable for purchasing insurance. Although car damage insurance can still be bought after 10 years, the corresponding coverage amount will be very low due to significant depreciation. Few insurance companies will underwrite policies for cars over 10 years old, and compensation will be made proportionally. Below is a related introduction to car damage insurance: Meaning of car damage insurance: Car damage insurance refers to compensation by the insurance company within a reasonable range when the insured or an authorized driver causes damage to the insured vehicle during an accident while driving. Coverage scope: This insurance does not cover theft, robbery, separate glass breakage, or separate wheel damage of the vehicle. Therefore, not all vehicle losses will be compensated by the insurance company after an accident.
I've been driving for almost twenty years, and I don't think it's necessary to keep buying car damage insurance indefinitely. Usually, a new car is valuable in the first few years, and repairs can be expensive if something happens, so it's good to have insurance for peace of mind. But after five to seven years, the car depreciates significantly. A car that originally cost 100,000 might only be worth 20,000 to 30,000, and the total premiums might even exceed the cost of repairing a single accident. For example, after driving my old car for ten years, replacing a broken headlight only cost a few hundred bucks, but the annual insurance premium was over a thousand—it just didn't add up financially. Plus, as minor issues pile up, repairs and parts become cheaper, so you can just patch things up yourself. If you're really worried about accidents, you can increase your liability coverage and save on the car damage portion to cover maintenance costs. The key is to check the car's market value—if it's below 30% of the original price, it's best to stop the coverage. You can easily find valuation tables online to figure it out.
As a financially savvy car owner, it's worth calculating when to stop buying collision insurance. In the first three years, when the car's value remains high, insurance is essential. However, after five years, depreciation accelerates, with average annual premiums exceeding 2,000 yuan, while the car's value may drop below 50,000 yuan. Continuing coverage for ten years could mean total premiums surpassing the car's worth. I usually check depreciation rate tables—typically, after five or six years, the benefits of collision insurance become too low, making it wiser to save the money as an emergency fund. The savings can be better spent on fuel or replacement parts. Maintaining the car well can delay issues, but cost-effectiveness is clear. Assess your driving frequency—urban traffic risks may justify keeping it longer, while rural drivers with less mileage can stop earlier.
From a safety perspective, I recommend not hastily canceling your collision insurance. An older car doesn't mean it's immune to accidents—urban rear-end collisions or flood damage from heavy rains can result in costly repairs. Generally, consider dropping coverage only after 8-9 years, but extend to a decade if the vehicle remains in good condition. Two years ago, a minor accident cost over 8,000 yuan to repair my aging car; thankfully, full insurance coverage handled it. When calculating premiums, don't just focus on the car's value—natural disaster coverage is worth retaining. Only cancel when the car is fully depreciated or scrapped. Good driving habits reduce accident rates, but unforeseen events happen—peace of mind outweighs saving a few bucks.
