The Best Auto Insurance for Used Cars

The United Services Automobile Association (USAA) offers auto insurance to individuals affiliated with the U.S. military. It combines good rates, solid coverage, and reliable customer service, making it a good choice for used car owners.

Exceptional Roadside Assistance

According to a report from AAA, vehicles 10 years old and older are twice as likely as newer vehicles to break down on the road and four times more likely to need a tow.² Purchasing emergency roadside services helps protect you in the event your used car breaks down. USAA’s roadside coverage includes:

• Towing (up to 50 miles)
• Tire changes (spare required)
• Fuel delivery (cost of fuel not included)
• Jump-starts
• Lockout services
• Winching for stuck vehicles

In addition, USAA offers a few roadside assistance services that are less common. For example, even if you don’t have roadside coverage, you can call for help and receive services at a special negotiated rate. USAA also offers coverage outside the U.S., including in the following places:

• Canada
• England
• Germany
• Italy
• Puerto Rico
• U.S. Virgin Islands

Strong Loan Terms

USAA provides an array of financial services in addition to auto insurance, such as vehicle financing. For used car models from 2015 to 2020, USAA offers loan rates starting at 5.14 percent. (According to Edmunds, the average used car APR is around 9 percent.³) USAA loan offers are good for 45 days and have the following benefits:

• No application fees
• Loan terms up to 84 months (seven years)
• 0.25 percent discount for enrolling in automatic payments

Typically, you will get a decision on whether your loan is approved within a few minutes. USAA does not impose fees or penalties for paying off a loan early.

Car Replacement Assistance

If you own a newer or higher-value used car, you may consider purchasing USAA’s car replacement coverage. With this coverage, in the event of a total loss, you will get an additional 20 percent over the actual cash value of the car. You will receive the money in cash so you can decide whether you want to spend it on another vehicle or something else.

Take note that in order to purchase car replacement assistance, you also need to carry comprehensive and collision coverage. For older vehicles, the value may be too low to warrant purchasing the coverage.

With solid customer satisfaction ratings from J.D. Power and a history of affordable rates, GEICO is a great choice for used car owners.⁴ It’s a particularly good option for those on the hunt for discounts. If you want affordable property casualty insurance, whether you want minimum coverage or full coverage, consider GEICO when seeking the best car insurance provider.

Many Discount Options

GEICO is known for being one of the most affordable insurers in the country, and it offers customers a number of discounts. The following can help you save on premiums for your used car:

Emergency Roadside Services

Because used vehicles are more likely to break down than new ones, it can be a good idea to purchase emergency roadside coverage. GEICO’s emergency roadside services cover the following:

• Towing (up to 20 miles)
• Jump-starts
• Tire changes (spare required)
• Lockout services for keys locked in vehicle (up to $100)
• Winching if your vehicle is stuck on or near a road
• Fuel delivery (cost of fuel not included)

Coverage starts at $14 annually per vehicle, or a little over a dollar a month. If you hold coverage and pay for services out of pocket, you can submit a claim for reimbursement. GEICO claims that assistance typically arrives within an hour of calling for help.

Solid Mobile App

For used car owners who want to manage their policies via a mobile app, GEICO is a good choice. The GEICO Mobile app holds a 4.8-star rating in the App Store and a 4.5-star rating in Google Play. The app provides a number of functionalities, including:

• View and pay your bill.
• Access your insurance card and add it to your digital wallet, which you can use as proof of insurance.
• Call for roadside assistance 24/7 (with coverage).
• Submit photos of vehicle damage and receive claims estimates.
• View your car’s service history, check for open recalls, and create a maintenance schedule.
• Receive answers to your questions through a virtual assistant.

State Farm combines affordable coverage with strong customer service and financial strength. With multiple ways to save, it’s an especially strong choice for young drivers of used cars.

Discounts for Young Drivers

Because the cost of insuring teen drivers is higher than for adults, a used vehicle often makes the most sense. In addition to the savings of driving a used car rather than a new one, State Farm offers several ways for young drivers and their families to spend less on auto insurance:

• Steer Clear program: Drivers under age 25 with no at-fault accidents or moving violations in the past three years can save up to 15 percent. To qualify, drivers must complete a training course in the State Farm mobile app, which includes lessons, videos, and real-life driving practice.
• Good student: Full-time students under age 25 can save up to 25 percent for maintaining a B average, or 3.0 GPA. Homeschooled students must rank in the top 20 percent of a national standardized test they took in the past 12 months to qualify.
• Driver training: Drivers under age 21 get a discount for taking an approved driver education course. If multiple young drivers share a car, all of them must take the course in order to get the discount.
• Student away at school: Students under age 25 who attend school away from home get a discount. To qualify, the student must go to school at least 100 miles away, keep the car at home, and use it only on breaks and holidays.

In addition, if a teen is driving a low-value car or a vehicle older than 10 years old, you may consider removing collision and comprehensive coverage from your policy in order to lower insurance costs. According to Kelley Blue Book, the average cost of a used car is $28,205, a record high as of January 2022, though the market is finally starting to cool down.

Good Rental Reimbursement

If you rely on your car as your primary mode of transportation, it’s a good idea to purchase rental reimbursement coverage. That way, if something happens to your vehicle, you don’t have to worry about paying out of pocket for a rental while your car is in the shop.

If you add rental reimbursement to your State Farm policy, you can choose your daily and per-claim coverage limits. The higher your limits, the higher your premium. For example, if you have limits of $15 per day and up to $375 per incident, you’ll pay less than if you have limits of $25 per day and $625 per incident.

State Farm’s rental coverage comes with a couple nice benefits:

• Travel expenses: If the damage to your car occurs more than 50 miles from home, State Farm will pay you up to $500 for lodging, meals, and transportation home. It will also include a return trip to pick up your car.
• Deductible repayment: If you’re involved in a covered incident in the rental car, State Farm will pay up to $500 toward the deductible.

Keep in mind, you must carry collision and comprehensive coverage in order to purchase rental reimbursement. In general, collision and comprehensive coverage make the most sense for used vehicles less than 10 years old. That’s because the older a vehicle gets, the less it’s worth and the lower the payout will be in the event of a total loss. For vehicles more than 10 years old, the annual cost of collision and comprehensive coverage may add up to more than what the vehicle is worth.

Extensive Rideshare Coverage

If you bought your used car in order to earn money driving for rideshare, State Farm is a great choice. Its rideshare coverage is one of the most widely available nationally. You can purchase the coverage everywhere except the following places:

• Alaska
• Hawaii
• Illinois
• Massachusetts
• North Carolina
• Rhode Island
• South Dakota

State Farm’s rideshare coverage extends the protections of your personal policy to the times when you’re driving for rideshare. While rideshare companies must offer some insurance coverage, it’s often insufficient, especially in the period when you’ve turned on the app and are waiting to match with a rider.

Keep in mind, Lyft and Uber have requirements for vehicle age, and older cars are often disqualified.⁶ Uber requires vehicle models to be 15 years old or newer. Lyft requirements vary by location, but fall within the 10- to 15-year range.⁷

Nationwide offers a pay-per-mile program, making it a good option for used car owners who don’t drive frequently or long distances. It also provides a unique insurance review program that can help ensure you have the coverages you need.

Pay-Per-Mile Coverage

If you bought your used car for short trips around town or other infrequent use, Nationwide offers an option that may cost less than a traditional policy. With Nationwide’s pay-per-mile program SmartMiles, you’ll pay a monthly base rate plus a rate per every mile you drive each month. For example:

SmartMiles offers the same coverage options as a traditional policy. It is available in all states except Hawaii, North Carolina, New York, and Oklahoma.

Nationwide tracks your miles driven with a small device that you install on your vehicle. Most vehicles manufactured after 1996 are compatible, though some hybrids and diesel-powered cars may not be.

Pay-per-mile options make the most sense for people who drive infrequently. For example, you might consider the option if you:

• Work from home
• Live and work in an urban area
• Have an extra car that you don’t drive regularly

Chat With an Agent Regularly

As your used car ages and loses value over time, your insurance needs may change. After you buy a policy, Nationwide will give you the chance to review your insurance needs with an agent regularly. The conversation can help you determine whether:

• You have the protection you need, without unnecessary coverage
• Upcoming life events will change your insurance needs, like moving, adding a new driver, or purchasing a vehicle and adding it to your policy
• You’re taking advantage of all available discounts

You can take advantage of this benefit every year, or whenever you experience a change that might affect your insurance needs.

Many Discount Options

Buying a used vehicle will save you money in car payments, but you’ll also want to take advantage of discounts to keep your insurance premium as low as possible. Nationwide offers the following discounts:

• Multi-policy: Combine your auto insurance with a policy for your home (whether you own or rent), motorcycle, or boat. You can also save money by bundling with life insurance or insuring multiple vehicles on your auto policy. Nationwide claims to offer a discount of up to 20 percent if you bundle home and auto, or an average savings of around $650.
• Driver tracking: Nationwide’s SmartRide program tracks four aspects of your driving: miles driven, hard braking, rapid acceleration, and nighttime driving. You’ll save 10 percent when you enroll and up to 40 percent based on your driving habits.
• Good student: If you’re a full-time student between the ages of 16 and 24 with a B average in school, you’ll earn a discount. Homeschooled students must score in the top 20 percent nationally on standardized tests like the PSAT, SAT, or ACT to qualify.
• Clean record: You can save up to 10 percent if you have no at-fault accidents or major violations in the past five years. However, this discount will not apply to those with poor driving records.
• Defensive driving: If you’re over 55 years old, you can earn a discount if you take a state-approved defensive driving course and have had no at-fault accidents in the past 35 months.
• Preferred payment: You’ll save money if you set up automatic payments for your premium and if you choose to receive your bills electronically rather than by mail.
• Anti-theft: Nationwide gives you a discount if you have an anti-theft device in your car, whether it was installed at the factory or after you purchased the vehicle.

Erie offers a range of coverage options and a number of benefits you won’t find everywhere, making it a good choice if you plan to purchase comprehensive and collision coverage. In addition, J.D. Power has consistently ranked Erie highly for customer satisfaction, and Erie holds an A+ rating for financial strength from AM Best.