The general rule is: If the cost of comprehensive and collision exceeds 10% of your vehicle's value, that's the time to dump it and just have liability coverage. You can determine your vehicle's value at Edmunds.com, KBB.com or NADA.com. Let's say you have a 10-year-old vehicle that's worth only $4,000.
A good rule of thumb is that when your annual full-coverage payment equals 10% of your car's value, it's time to drop the coverage. You have a big emergency fund. If you don't have any savings, car damage might leave you in a severe bind.
If your car is worth less than the cost of full coverage, you may want to choose liability-only coverage, as your premium will be much lower. Typically, if your car is worth less than $4,000, it may make more sense to go with minimum liability coverage.
You do not need full coverage on your 15-year-old car unless it is financed through a finance company or someone else is holding your title. ... the amount of coverage you need is the amount it takes to pay for the auto repairs or replace your automobile if it is totaled.
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