A new poll from R. L. Polk & Company revealed that 64 percent of consumers said they were “very or extremely likely” to keep their current vehicle longer than they normally would due to economic conditions. Additionally, Polk reported that the average length of ownership of both new and used vehicles increased from a little more than three years in 2002 to nearly four years in 2008, a 24 percent increase.
Travelers, a leading provider of car insurance, is seeing the same trend of customers keeping their older vehicles longer. A higher number of older cars on the road increases risk and underscores the importance of having the proper coverage.
“People tend to think there is a big difference between insuring a new car versus an older one,” said William Pearse, vice president of product strategy and design for Travelers. “The fact is, regardless of the age of the vehicle, your insurance goals are the same; protect yourself, your family and your assets in the event of damage to your car, another car or injury to any passengers or others.”
Since older vehicles are typically lower in value, some owners purchase the minimum insurance possible. While that is an option, Pearse explains that purchasing the minimum coverage can create significant financial exposure, including the possibility of losing assets such as a home, other vehicles or savings in the event of an accident. Pearse says that’s a risk many people with older cars don’t want to take so they purchase additional coverage.
People with older vehicles might also consider higher deductibles for collision and comprehensive coverages (collision covers damage from a collision, comprehensive covers theft and damage not involving a collision with another car). Higher deductibles may reduce insurance costs but Pearse says it’s important to remember that the higher the deductible, the greater the out-of-pocket expenses will be if the car is damaged and needs repair.
“Another consideration is that older cars can be a hazard on the road if maintenance on critical parts like tires, brakes and suspension is deferred,” added Pearse. “Routine maintenance should never be deferred, and with older cars, it’s also important to have sufficient limits on coverages like bodily injury - which would cover injuries you may cause to someone else - and property damage. It’s a quick call to your agent to make sure you have the right type and amount of insurance coverage.”
Encouragingly, regular maintenance is top of mind with respondents in the Polk survey. Specifically, 81 percent said they planned to take better care of their vehicle to keep it running longer. Travelers’ auto claim professionals say there are some maintenance guidelines that can help extend the life of an older car. They include:
“Delaying routine maintenance on an older vehicle will accelerate wear and tear. Worst case scenario, you might be driving a vehicle that’s a safety risk for you and your family,” said Rich Dryden, director of auto claim education for Travelers. Dryden adds that regular maintenance can add miles to the life of your car and cut down on avoidable expenses. “For example, if you delay getting new brake pads, you might end up needing rotors as well, which is a costly repair.” Vehicle maintenance will vary based on the vehicle year, make and model but following the owner’s manual recommended maintenance intervals will work well in extending the life of your vehicle.