Is Comprehensive Car Insurance Worth It for a Low Value Car?

So I've been comprehensively insured since I got my car, and just found out the market value they will cover is between $4900 and $6900 (this is despite all second hand cars of exact make, model and year going for 8-12k but that's a whole other issue). Basically wanted opinions if people think it's worth comprehensively insuring a car if it's only covered for that amount.

Comments

  • +2

    Depends how much it costs you really.

    • Yep.
      When I was under 25, they were trying to charge in excess of $2,500 per year for full-comp insurance. Whilst the car I was driving I only bought for $1,000. So in cases like that, it's not worth it. And no, I didn't have any history whatsoever. That's just how the system is.

      I think someone had a rule of thumb here. Can't find the comment anywhere. It was like any car at any price, get third-party F&T (half) for a couple hundred per year regardless. If you're able to get full-comp for cheap (ie $1k or less), then it is worth using for a car that is worth $11k-$16k. If you can't get it cheap, see if you can be nominated on a parent. And if not, and it's expensive (over $1.5k per year), stick to Fire-and-Theft for an affordable car. I think the value was $21k or over, in that case, buy full-comp even if it is expensive.
      …all in all, you have to gauge your own risk, and decide what is financially sound to you!

  • +4

    If you can afford to cover the cost of any damage to your car in the event of an accident as long as you are insured for damage caused to others (Third Party) you could get away without having comprehensive.

  • +1

    Third party - my only issue is that if your car is damged off then

    you wont get a hire car, to wait out repairs

    its how much do you value your time, and how hard would it be for you to buy a new car?

    • Most jobs are very flexible these days and if you're in a stable financial position it takes about a week to apply for a loan and find a good car.

  • +5

    I thought the same but then found out that third party insurance on low value cars cost almost the same as comprehensive.

    • +4

      I’ve reached the point where I’ll pay the extra $100 a year for comprehensive over 3rd party alone on the basis if I am involved in a smash I’ll just make a phone call and somebody else can sort it out.

      But when I was young and it was $700 a year more…

  • +1

    With AAMI, Third Party Property, you are covered up to $5,000 if you are hit by a uninsured driver if you can provide full details. This worked for me with my late 90's Hyundai Excel.

  • +2

    Ring another insurer and get agreed value.

  • Third party property is ok for low value vehicles, but… the catch is, you need to be confident you can afford to go without or repair or replace your vehicle at short notice.

    Some TPP policies will cover you for an uninsured driver hitting you for up to $5k or similar. If the other driver is insured but won’t play ball you aren’t covered and have to do whatever leg work yourself. That’s when comprehensive comes into it own, when you need to chase another party for repair costs. With comprehensive you book your car for repairs and they sort out the rest.

    Everyone is different in their cut off point for TPP. I insured an $8k car TPP. I’m pretty confident I won’t crash into anyone and can probably repair minor damage myself, also always have rainy day funds in the bank and could at short notice go or and get another cheap car to get around if required. I got comprehensive for my current vehicle bought for a bit over $15k.

  • -2

    No, to me it's really not worth it unless you're driving a $50,000+ car. Anything below that, you're just wasting money. If it's a couple hundred more expensive, then go for it, but for most people it's usually $1k of more.

    I have a 18' Mustang that I originally paid $60k for. It was my second car, mostly a weekend driver for leisure, so I never bothered with comprehensive. If I crash it, I'm mature enough to walk away and accept it.

  • It really depends.

    My brother has a car with one major modification that the suspension has been raised and has issues finding insurers for it. He was paying comprehensive for most of the time he has owned the car. He purchased it for approx $8k and has been paying $1k in insurance for many years. He decided he'd rather save money as he has essentially paid for so much insurance he's probably spent up to 8k already on it. So he dropped down to 3rd party cover - worth mentioning his work was impacted by covid so it was more a monetary decision.

    I've recently purchased a low value car - lower than yours. It took so long to find a car in this crazy market I opted for comprehensive insurance even though the cost is $500 just for peace of mind.

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