Get the coverages you need for a used car.
Available to military members and their families, USAA offers competitive rates for insuring used vehicles without compromising on the quality of coverage. In particular, USAA’s financing terms for used cars and roadside assistance offerings set it apart.
GEICO is widely available and offers some of the best rates and car insurance discounts. GEICO holds an A++ rating from AM Best for financial strength, meaning you don’t have to worry about its ability to pay for claims.1
According to the Bureau of Transportation Services, the average age of a vehicle in the U.S. is about 12 years. The agency also found that used cars account for about 70 percent of vehicle sales in the country.
Some providers charge less to insure used cars, mostly due to their lower values. However, other companies charge more, partly because used vehicles lack the cutting-edge safety features of newer ones. Each insurance provider uses a different formula to calculate premiums, which is why it’s important to shop around. We’re here to walk you through the pros and cons of each insurer and help you pick the company that’s right for your used car.
|Insurance company||What it’s best for||Available discounts||Average annual cost||Review|
|USAA||Overall||Good student, clean record, garage car on military installation, track safe driving behavior, multi-policy, multi-vehicle, newer vehicle (3 years old or less), anti-theft, loyal member||$1,151||USAA review|
|GEICO||Discounts||Good student, vehicle safety features, good driver, defensive driving course, driver education course, military member, federal employee, membership association, multi-vehicle, multi-policy||$1,194||GEICO review|
|State Farm||Young drivers||Multi-vehicle, multi-policy, track safe driving behavior, accident-free, good driving history, defensive driver course, safe vehicle, good student||$1,419||State Farm review|
|Nationwide||Low mileage||Multi-policy, multi-vehicle, track safe driving behavior, accident-free, good student, defensive driver course, anti-theft, safe driver, automatic payments, paperless||$1,614||Nationwide review|
|Erie||Comprehensive and collision optional coverage||Good driving history, track safe driving behavior, safe vehicle, multi-policy, multi-vehicle, reduced usage, young driver, annual payment, good student||$1,084||Coming soon|
Best Overall: USAA
Best for Discounts: Geico
Best for Young Drivers: State Farm
Best for Low Mileage: Nationwide
Best for Comprehensive and Collision: Erie
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.
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:
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:
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:
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.
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.
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:
|Daytime running lights||3%|
|Good driver (5 years accident-free)||22%|
|Seat belt use||Varies|
|Defensive driver course||Varies|
|Driver education course||Varies|
|Emergency military deployment||25%|
|Membership and employee (over 500 affiliates, including alumni associations, Berkshire Hathaway Companies, and professional organizations)||Varies|
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:
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.
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:
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.
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:
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.
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:
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.
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:
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.
|Coverage||App is on||Matched with rider||Transporting passenger|
|Bodily injury and property damage liability||State Farm||Rideshare company||Rideshare company|
|Medical payments||State Farm||State Farm||State Farm|
|Collision, comprehensive, rental reimbursement, and emergency roadside assistance||State Farm||State Farm||State Farm|
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.
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:
|Monthly base rate||Cost per mile||Miles driven per month||Monthly cost|
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:
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 can take advantage of this benefit every year, or whenever you experience a change that might affect your insurance needs.
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:
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.
While it doesn’t always make financial sense to purchase comprehensive and collision coverage for a used car, Erie offers several perks that may tip the balance. If you purchase collision and comprehensive coverage, you also get the following:
|Transportation expense/rental reimbursement||Rental coverage for a basic compact sedan is included in your policy automatically. If you need a bigger vehicle and/or want rental coverage for collision losses, you can buy additional coverage.||Comprehensive|
|Auto glass repair||Erie waives the deductible for glass repairs. For a small charge, you can add full window glass coverage, which waives the deductible in the event of a replacement. With both options, new wiper blades are included in the event of windshield replacement.||Comprehensive|
|Locksmith services||You get up to $75 in locksmith costs if you lock your keys in the car.||Comprehensive|
|Personal items coverage||Erie helps cover the loss of clothing, luggage, and other personal belongings inside the car in the event of a covered incident.||Collision or comprehensive|
Additionally, each year you go without filing a claim, Erie will reduce your deductible by $100, up to $500 total.
A recent J.D. Power study found that rising costs of auto insurance have decreased customer satisfaction with insurance providers. Kelley Blue Book reports that the average cost of insurance rose by about 5 percent in 2022, and rates are projected to rise by another 5 to 10 percent in the coming year.8
Erie’s rate lock feature can help you avoid car insurance rate increases by locking in your rate year over year. In other words, your rates will not change when you renew your policy unless you make certain changes. These include:
If you choose to add or remove coverages, your premium will reflect that adjustment without changing the cost of your other coverages. Keep in mind, rate lock does not guarantee coverage. For example, if you get a DUI or commit another serious violation, Erie can choose to drop your policy.
If you purchased Erie’s better car protection coverage, in the event of a total loss, you can replace your car with a vehicle that is two model years newer. Purchasing the protection can offer a silver lining in a stressful situation.
Keep in mind that this coverage is not available in New York or North Carolina. In order to purchase the coverage, you need to have collision and comprehensive coverage. Erie also offers lease/loan protection, which will cover the balance of your auto loan if your car is totaled.
To determine the best auto insurance companies for used cars, we used a three-point methodology:
The following companies offer some of the best auto insurance:
The best company for an individual depends on a number of factors, like location, type of coverage, credit score, and age. Insurance is cheaper for those with good credit, for example.
The following providers offer cheap auto insurance:
In general, the best way to find cheap auto insurance is to shop in advance and get at least three quotes before choosing a provider.
Yes, you should get insurance before buying a used car. In most states, you can technically buy a car without auto insurance, but you can’t legally drive it off the lot. It’s wise to get a car insurance quote before going to the dealership or meeting a private seller so that you can insure the car as soon as you buy it.
If you already have insurance for another vehicle, many insurers have a grace period to add newly purchased vehicles. During the grace period, your existing insurance will cover the car, even if you haven’t added it to the policy yet.
The cost to insure a used car depends on the vehicle type; the average cost of insuring a vehicle is $1,070 annually, or $89 a month. According to Progressive, a Subaru Forester and Honda Accord are two of the cheaper cars to insure.
Search for a Rating. AM Best. (2022).
Double Digits Means Double Trouble for Vehicle Breakdowns. AAA. (2018).
Auto Loan Interest Rates Climb to Highest Level Since 2019 in Q3, According to Edmunds. Edmunds. (2022).
Usage-Based Auto Insurance Takes Center Stage as Satisfaction Flatlines, J.D. Power Finds. J.D Power. (2022).
Electronic Stability Control Systems for Heavy Vehicles. National Highway Traffic Safety Administration. (2022).
Vehicle Requirements. Uber. (2022).
Vehicle requirements. Lyft. (2022).
Car Insurance Premiums: Here’s Why They Keep Rising. Kelley Blue Book. (2022).