Are you a gearhead who lives and breathes to talk about cars?
Or a passionate collector who carves out time every day to review all of the listings on Bring a Trailer?
A talented mechanic who loves to tinker with older vehicles and says things like “They don’t make them like they used to,” and “Only people who drive manual transmissions really know how to drive”? If so, you’ve earned the title of classic car enthusiast.
From clubs dedicated to certain makes and models to passionate fans of a specific manufacturer, car collectors dedicate a lot of time and money to fuel their love for vehicles. Making sure that these cars are financially protected with the right kind of insurance is key to having the peace of mind that allows you to enjoy driving these valuable cars instead of wondering what might go wrong.
If you are in the market for a classic or collector car, here’s what you need to know about insuring these special vehicles.
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Classic Cars, Antique Cars, Collector Cars, and Enthusiast Cars
No matter what kind of car you have, there’s an insurance policy to cover it. Definitions matter and they’ll help determine what kind of policy will best suit your needs. To get the right classic car insurance quote, you’ll need to be clear about what type of car you have, its age and condition, and whether you intend to drive it or show it.
Defining a classic car for insurance purposes can be tricky, but a good rule of thumb is to ask yourself if the vehicle will increase or hold its value, and whether you’ll be using it for daily driving, exhibitions and club activities, or occasional pleasure driving.
If you want to insure your car with classic car insurance, there are some qualifying factors that will need to be met. Here are some of the aspects your insurer could consider to determine whether your car is a candidate for collector car coverage:
- To be considered classic, a car will typically need to be at least 25 years old, but age isn’t the only factor.
- New cars that may qualify for collector car coverage are typically exotic makes, such as Lotus or Aston Martin.
- Commonly found antique cars (those over 45 years old)—such as Fords or Chevys—usually qualify.
- Classic work-use vehicles, such as older military vehicles or fire trucks, are also potentially eligible for collector’s coverage.
- Storage requirements may also apply. You could be required to store your collector car in an enclosed structure such as a locked garage or storage unit.
As noted in the first bullet point above, the age of a vehicle isn’t the only factor that makes a car a collector’s item. States and or Insurance Carriers frequently have their own individual sets of requirements that will determine if a vehicle meets the definition of a classic car.
How Much You Drive Impacts Your Premium
Generally speaking, you’ll drive a collector car less frequently than your “daily ride,” and fewer miles driven could potentially translate into a lower rate.
Of course, car insurance premiums are determined by a number of factors including your driving record, so premium costs can vary. In fact, in some states, if you’ve had speeding violations, reckless driving convictions, or other serious infractions in the last three to five years, you might not even qualify for a classic car policy.
Some insurers set strict limits on how many miles a car can be driven annually for it to still qualify for classic car coverage. You’ll be able to get out on the road and enjoy your classic car, but it won’t be your daily ride, and that will be reflected in your premium cost.
What If My Collector Car Is in an Accident?
Even if you only take your collector car out on the road once in a while, there’s a chance of an accident. That’s why you need to read your classic car insurance policy closely and understand what is covered.
When you’re choosing classic car insurance, there are three very important factors to consider:
- Who chooses the mechanic to work on your classic car?
- How are replacement parts covered?
- Is the vehicle “Actual Cash Value” or “Agreed Value”?
Classic and collector cars are often older, specialized vehicles, and modern mechanics might not be as familiar with their quirks. Make sure that your classic car coverage recognizes this aspect of classic car ownership and give you the flexibility to choose your mechanic if the vehicle needs repairs.
Depending on the age and rarity of your collector car, replacement parts might be difficult to source. While you are getting classic car insurance quotes, ask about original replacement parts coverage. You’ll want a policy that makes every effort to track down original parts for your classic car—even if the car is rare and parts are hard to find.
Actual Cash Value vs. Agreed Value
As previously mentioned, one factor in determining whether a vehicle can be considered a classic is if it holds or appreciates its value. This makes a classic car a bit different to insure, since most cars depreciate soon after purchase. In the event of a total loss, you may wonder how an insurance company will view your classic car: as an asset that has increased in value over time or as an old car that is worth far less.
For example, if you are in an accident in your daily vehicle, the insurance adjuster will determine the value of your car based on what similar cars are worth in the current market. This is called “actual cash value.” This is much harder to do with a rare or classic vehicle, because there are far fewer of them around.
A policy designed to protect a classic car will often feature something called an “agreed value.” When you go to insure your classic car, you’ll typically work with the insurance company to mutually agree on what your classic car is worth. This may be based on a number of factors including:
- What you paid
- The car’s condition
- Any improvements you’ve made
- The current market value of the car
- How challenging it may be to source original parts for the vehicle
The agreed value will usually be higher than the amount assessed if you were to apply for a regular auto policy on the same car.
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The Bottom Line
For some, cars are far more than just a means of transportation to get you from point A to point B. Passionate collectors and enthusiasts are devoted to certain manufacturers, makes, and models.
Defining what a classic car is can be a bit challenging, but from Volkswagen Beetles to Ford Mustangs to Porsche 911s, there are legions of fans dedicated to preserving and maintaining these special automobiles.
If your “dream car” is a classic vehicle, you’ll want to make sure that it is protected and insured. Getting a range of classic car insurance quotes is the first step in protecting your car. Speak with an Expert Agent or start comparing quotes online now. Understanding some of the finer details about this specialized insurance product will help you to make the right choice to protect your investment.
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