Why Does a Classic Car Cost More to Insure?
Owning a classic car is a dream for many automotive enthusiasts who have a particular love for vintage craftsmanship. Classic cars evoke nostalgia by giving us a tangible link to bygone eras where distinctive aesthetics ruled the streets. The sight of a vintage Mustang, a gleaming Corvette, or a timeless Porsche rolling down the road is enough to turn heads and spark conversations.
Unlike modern vehicles, classic cars have a unique personality, thanks to their elegant curves and mechanical simplicity. Each model tells a story, whether it’s a roaring muscle car from the '60s, a sleek European roadster from the '50s, or a grand cruiser from the '70s.
Driving a classic car is more than just transportation—it’s an experience that immerses the owner in history, style, and the golden age of automotive design.
It’s also worth noting that many classic cars appreciate in value over time, making them worthwhile investments. Beyond the aesthetic and nostalgic appeal of these vintage vehicles, there is also a practical reason to purchase them.
However, if you're thinking about getting insurance for your classic ride, you might be in for a surprise—the cost can be significantly higher than insuring a modern vehicle. But why exactly is that? What makes classic car insurance more expensive? This is what we’re going to talk about here today.
What Defines a Classic Car for Insurance Purposes?
Before diving into the costs of insurance, we need to understand what qualifies as a “classic” car in the eyes of an insurance company.
For insurance purposes, a "classic car" is generally defined as a vehicle that is at least 20 to 25 years old and has been maintained or restored to its original condition. Insurance companies typically require that classic cars are not used as daily drivers and limited for special occasions, exhibitions, or club activities.
Take note that the definition can vary by insurer, and some may have additional criteria. For example, vehicles that have been significantly modified or customized may fall into a different category, such as collector or antique cars, depending on the insurer's guidelines. Some cars fall into other categories like vintage (older than 45 years) or antique (50+ years), which may have even stricter requirements.
When determining a vehicle’s status as a classic car, insurance companies may also consider factors like rarity, historical significance, and market value. Some insurers extend coverage to modern limited-production or exotic vehicles under "classic" or "collector" policies, even if they are not yet 25 years old.
Unlike standard auto insurance, classic car policies often offer agreed-value coverage. This means the insurer and owner agree on the car's value upfront instead of relying on depreciation. This ensures that the car is adequately protected in case of damage or loss.
Why is Classic Car Insurance More Expensive?
Classic car insurance tends to be more expensive for several reasons, and they all revolve around the car’s value, rarity, and maintenance needs.
Higher Replacement and Repair Costs
Unlike modern cars, classic cars often require specialized parts. If your 1967 Chevrolet Camaro gets into an accident, you can’t just buy a new one at a dealership. Parts for classic cars are often:
Difficult to find – Many are no longer in production.
Expensive – Specialized parts often come from private sellers, auctions, or overseas.
Custom-made – Some parts require handcrafting, restoration, or expensive repairs by skilled professionals.
This makes even minor repairs far more costly than fixing a modern car, leading to higher insurance costs.
Classic car restoration is also more expensive since it requires skilled mechanics with expertise in vintage models. Because these cars are no longer in mass production, insurers factor in the difficulty of sourcing parts and skilled labor when determining premiums. These factors drive up the cost of repairs, leading to higher insurance costs.
Increased Theft Risk
These timeless beauties are not only sought after by collectors and enthusiasts but also by criminals. It does not help that these expensive vehicles often lack advanced security features like GPS tracking, immobilizers, and alarm systems. This makes them much easier targets for thieves.
Additionally, certain classic models have high resale values and limited replacement parts, which further drive their desirability on the black market. Because of this elevated risk, insurance companies charge higher premiums to cover potential losses, ensuring that owners can recover the car’s value in the event of theft.
Limited Use and Storage Requirements
Most classic cars aren’t daily drivers, and insurers prefer to keep it that way. Classic car insurance can be more expensive due to strict limitations on usage and storage requirements.
Insurers typically require classic cars to be driven only occasionally, such as for car shows or special events, rather than daily commuting. Additionally, policyholders may need to store their vehicles in secure, climate-controlled garages to protect them from damage, theft, or environmental wear. If you don’t meet these requirements, your rates could increase.
These restrictions ensure the car remains in pristine condition, but they also increase costs because specialized coverage is tailored to the unique risks and preservation needs of classic automobiles.
Specialized Coverage Options
As we mentioned earlier, classic car insurance typically operates on an agreed value basis, unlike regular insurance, which uses actual cash value (ACV) to determine a car’s worth—factoring in depreciation.
This means that the insurer and the policyholder agree on a set value for the car, often based on an appraisal or market assessments. Since classic cars appreciate in value rather than depreciate, this agreed value is usually much higher than what a standard policy would cover. As a result, insurance providers take on a greater financial risk, leading to higher premiums.
For example, since a well-maintained 1970 Dodge Challenger might be worth hundreds of thousands of dollars, insurers take extra precautions to protect their liability.
Additionally, classic car insurance is typically more expensive because it includes specialized coverage options that standard policies do not offer. Aside from offering coverage for rare or custom parts and restoration expenses, they may also provide protection against diminished value after an accident.
These tailored features ensure that classic car owners receive appropriate financial protection, but they also contribute to the higher cost of insuring these prized automobiles.
Factors That Influence Classic Car Insurance Rates
While classic car insurance is generally more expensive, the actual cost varies based on a few key factors. For starters, the age, make, and model of a classic car significantly impact insurance rates.
Older vehicles, particularly rare or exotic models, tend to have higher insurance costs due to the difficulty of finding replacement parts and the specialized labor required for repairs. On a similar note, vehicles with a high historical value or those in pristine condition may require more coverage, further increasing premiums.
Insurers assess the car’s market value, collectibility, and potential appreciation when determining costs. Here are some other factors that influence classic car insurance rates:
Driving History and Usage
It may not be apparent, but a driver’s history and how they use their classic car actually matters in determining insurance rates. If the owner has a history of accidents or traffic violations, premiums will likely be higher because of the increased risk.
Like we mentioned above, most classic car insurance policies also come with mileage restrictions, as these vehicles are typically not used for daily commuting. If you want lower premiums, you may have to limit your usage of the vehicle to car show appearances or occasional weekend drives.
Storage Conditions
Vehicles kept in secure, climate-controlled garages or specialized storage facilities tend to have lower premiums. This is because they are better protected from theft, vandalism, and environmental damage. On the other hand, if a classic car is parked outdoors or in an unsecured area, insurers may consider it a higher risk and increase rates accordingly. Some policies even require proof of proper storage to qualify for coverage.
Modifications and Customizations
Any modifications or customizations made to a classic car can influence insurance rates.
Some upgrades may reduce premiums such as modern safety features. On the other hand, if you add performance modifications to increase speed or horsepower, it could actually raise costs because insurers will think of it as making the car more prone to accidents.
Owners should ensure that their policy accounts for all modifications to guarantee adequate coverage in case of damage or loss.
How to Reduce Classic Car Insurance Costs
Although classic car insurance tends to be expensive, there are a few ways to reduce your premium while still keeping your prized automobile well-protected. Here are some strategies you can try:
Choose a Specialized Classic Car Insurer
Going for an insurance provider that specializes in classic cars can lead to lower premiums and better coverage overall. Unlike standard auto insurers, these companies understand the unique value and maintenance requirements of vintage vehicles. This is why they offer agreed-value policies that ensure you receive full compensation in case of loss. Specialized insurers may even provide tailored discounts based on how you use and store your vehicle.
Limit Your Annual Mileage
Because many classic car insurance policies are based on limited vehicle use, it may be a good idea to drive fewer miles annually. Insurers view low-mileage vehicles as less risky, so this may allow you to qualify for lower premiums.
Some policies even have tiered pricing based on mileage caps, so keeping your classic car as a weekend cruiser rather than a daily driver can significantly reduce costs.
Install Anti-Theft Devices
Enhancing your classic car’s security can lead to insurance discounts. Installing anti-theft devices like GPS trackers, steering wheel locks, or immobilizers reduces the risk of theft, making your car less of a liability in the eyes of insurers. Secure storage also lowers your premium, so try to store your classic car in a locked garage or a monitored facility.
Bundle Your Insurance Policies
If you already have homeowners or other auto insurance policies, consider bundling them with the same provider. Many insurers offer multi-policy discounts. This can result in significant savings on your classic car insurance. Bundling simplifies the management of your insurance needs by consolidating them under one company.
Maintain a Clean Driving Record
A clean record with no accidents or traffic violations demonstrates responsible driving, which insurers reward with lower premiums. Safe driving habits not only help you avoid costly tickets but also ensure your classic car remains in pristine condition for years to come.
Work with Classic Car Deals to Find the Best Classic Cars for Sale
For many enthusiasts, the joy of cruising in a vintage vehicle, showing it off at car meets, connecting with fellow aficionados, and owning a piece of automotive history is worth the higher insurance cost. Owning a classic car is a labor of love after all.
While classic car insurance can be expensive, there are also a few steps you can take to lower your premiums. Understanding how it works can help you make informed decisions that will ultimately protect your investment.
If you want a classic car of your own, there are several options available to you. You can participate in a classic car auction or browse an online marketplace. There are also plenty of specialized dealerships that offer classic cars for sale.
But if you want the widest selection of classic cars (and trucks) that are available via consignment, you should choose Classic Car Deals.
Consignment is a process in which a car owner partners with a dealership, auction house, or specialized consignment company to sell their vehicle on their behalf. Instead of handling the sale personally, the owner entrusts the seller to market the car, negotiate with buyers, and finalize the transaction. In return, they take a commission or a flat fee once the car is sold.
This approach allows classic car owners to benefit from the seller’s expertise, network, and resources while avoiding the hassle of private sales and negotiations.
Located in Cadillac, Michigan, this is the world’s largest online consignment company. Classic Car Deals features all the vintage vehicles they personally have in stock at their headquarters—all you need to do is visit their showroom. If you would rather look at the classic cars online, you can also check out their website.
Classic Car Deals has consignment cars all over the country, so don’t worry if you don’t see your dream car right away. The Classic Car Deals team will work hard to make sure you can find the classic car that matches your exact preferences and needs.
Call Classic Car Deals once you’ve found your ideal classic car to double check on the location. They provide an easy and hassle-free way for you to shop classic cars for sale nationwide, offering the widest selection of vintage, exotic, and collectible cars and pickup trucks.
Your first step to buying your dream car is to contact one of their reps today. Visit their Consignment page today for more details.
*While every reasonable effort is made to ensure the accuracy of this information, we are not responsible for any errors or omissions contained on these pages. Please verify any information in question with Dealer.