Regarding the collision coverage on the auto policy, Guideline many people follow is to remove coverage after the vehicle is ten years old. Many believe that the mark after ten years, most vehicles are not valuable enough to justify maintaining the costly collision coverage on the policy. Nowadays, things are not that simple. Here are some reasons why I think the rule "ten years" applies.
The vehicles tend to hold their value for much longer than in the past. There seem to be two reasons for this. First, vehicles can run much longer than ever before. It used to be that when a vehicle hit 100,000 miles, he had nearly reached the end of the road in terms of reliability. Today's vehicles are more reliable, with many vehicles to 0,000 miles or more. The second reason is that new vehicles are at very high prices, which led to a push on the used car market. To give you an example of how vehicle prices rose, a Ford Explorer 1994 cost about $ 20,000 when it was new. In contrast, a 2014 Ford Explorer is more than $ 40,000. Many entry-level vehicles are now priced at about $ 20,000. Those who can not afford a vehicle with such a large round tag price on the market of used cars for a reliable car at prices they can afford. The more affordable price tag when combined with the prolonged reliability of used cars making it an ideal option for many car buyers.
Another reason to keep collision coverage on your policy is the cost of repairs. It is easy to say that if you total your car, you just go buy another one, but if you are involved in an accident and you just damage the bumper? Have you registered for $ 00 repair? In most cases, the cost of repairs must be paid in full before you can restore your vehicle. Funding is an easy way to get a new (or used) car, but it is generally not available for repairs so you must be sure that you have some money in the bank to cover damage minor to your vehicle. The labor rate for body shops are varied, but most repairs are costly. For example, the work rate is for body shops in Massachusetts is $ 40 / hour. In Rhode Island, the cost is $ 45 / hour. Add these times figures for the cost of spare parts and, if necessary, a rental car and the cost of this "attachment" can skyrocket quickly enough.
When I discuss the possibility of removing the collision with clients, I tell them to look at two things. The first is the value of the vehicle. While most policies do not offer replacement cost coverage for collision, they value factor and the condition of the vehicle, the vehicle options, etc. to determine the total loss figures. The other thing that I tell people to consider is whether or not they have money in the bank to cover damage the vehicle if it were to occur tomorrow. In many cases, people are reconsidering remove collision coverage just because their car is ten years old.
Your vehicle is older than ten years? Do you have collision insurance? Tell me why (or why not) below!
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