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What Is Classic Car Insurance?
With traditional car insurance, reimbursement means you will get the actual cash value of your car and this factors in depreciation. However, classic insurance gives you a mutually agreeable payment, compensating you with an appreciable amount of money commensurate with the value of the car.
Like a landed property, classic cars increase in value. If you take extra time to care for and maintain them, you really should compare classic car insurance and get value for your money. This article will provide you with the ultimate guide on classic cars and getting cheap classic car insurance quotes.
Classic Car Insurance FAQs
What is a Classic Car?
A classic car is a vehicle that is typically older and of interest to collectors or car enthusiasts due to its historical or nostalgic value, unique features, or limited production volume. However, the exact definition can vary depending on who you might ask.
In the context of car shows and enthusiasts’ clubs, a classic car often refers to a car from a specific era of production. This can vary, but cars from the mid-20th century—particularly the 1950s, 60s, and 70s are often considered classic.
Insurance companies and various jurisdictions may have their own definitions, which are used to determine eligibility for things like classic car insurance or historic vehicle license plates. These definitions often involve a specific age threshold. For instance, in the UK, cars over 40 years old are often classified as classics for tax and insurance purposes, but different insurance companies may have different age cutoffs.
For the Antique Automobile Club of America, a ‘classic’ is a vehicle aged 25 years or more, while the Classic Car Club of America has a stricter definition, stating that a car must be between 20 and 45 years old to be considered a classic.
Importantly, not every old car is considered a classic. Condition, rarity, and historical significance can all play a role in whether a car is considered a classic. Some relatively recent limited-edition cars, for instance, might be considered classics due to their rarity and significance.
Ultimately, the term “classic car” is somewhat subjective and can depend on various factors.
How much does classic car insurance cost?
The cost of classic car insurance can vary greatly depending on a number of factors. These can include the value of the car, how much it’s driven, where it’s stored, and the owner’s driving history. However, classic car insurance is often cheaper than standard car insurance.
This is because classic cars are generally driven less frequently than regular-use vehicles, often only for special occasions, shows, and rallies. They are also typically well cared for, often stored in secure, weatherproof conditions, and owners tend to be very mindful when driving them due to their value and nostalgic significance. All these factors tend to reduce the risk of damage and therefore the cost of insurance.
For a more precise estimate, it’s best to get a quote from a classic car insurance provider. They’ll be able to give you a cost based on your specific circumstances and the details of your car.
Just remember that as with any insurance policy, it’s not just about finding the cheapest premium. It’s important to ensure the policy covers everything you need it to. For instance, if you’re restoring a classic car, you’ll want to ensure the policy covers the car during the restoration process. Similarly, if you travel to car shows, you’ll want to make sure your policy covers any damage that might occur during transit.
How can I reduce the cost of classic car insurance?
There are several ways you can potentially reduce the cost of classic car insurance in the UK:
Limit your mileage: As classic cars aren’t usually daily drivers, insurance companies often offer discounts for low mileage. Make sure to give your insurer an accurate estimate of your annual mileage.
Secure Storage: Keep your car in a secure, locked garage when it’s not in use. The safer your car’s storage, the lower your insurance premiums can be.
Join a car club: Many insurers offer discounts to members of recognised classic car clubs, as these members are usually seen as more responsible owners.
Improve Security: Installing an approved security system can help lower your insurance premiums. This could include immobilisers, alarms, or tracking devices.
Advanced Driving Courses: Taking an advanced driving course can show your insurer that you’re serious about driving safely, which can reduce your risk level and, therefore, your premiums.
Agreed Value: Agree on a value for your car with your insurer. This will ensure you’re not paying more than necessary for your insurance. Make sure the agreed value accurately reflects your car’s worth, taking into account its condition, rarity, and any modifications or restorations.
Shop Around: It’s always a good idea to compare several quotes to ensure you’re getting the best deal. Remember to compare the details of each policy, not just the price.
Voluntary Excess: Opting for a higher voluntary excess can reduce your premium, but make sure it’s an amount you could afford to pay in the event of a claim.
No Claims Bonus: If you have a history of safe driving with no claims, this can significantly reduce your insurance costs.
Insure Multiple Cars Together: If you own more than one classic car, insuring them all under the same policy can often reduce the overall cost.
Remember, the cheapest policy isn’t always the best one. It’s essential to ensure you have the cover you need to protect your classic car fully.
Why is classic car insurance cheaper than standard policies?
Classic car insurance is often cheaper than standard car insurance for a few reasons:
- Limited Usage: Classic cars are typically not used as daily drivers. They are usually driven less frequently, often for exhibitions, car shows, or leisurely outings. This reduced road time means less risk for insurers, leading to lower premiums.
- Secure Storage: Owners of classic cars generally take exceptional care of their vehicles. This includes secure, often indoor, storage which can significantly reduce the risk of theft or environmental damage.
- Maintenance and Care: Classic car owners are usually enthusiasts who meticulously maintain and care for their vehicles, making mechanical failures less likely.
- Lower Risk of Accidents: As classic cars are typically driven more carefully and less frequently than standard cars, they are less likely to be involved in accidents.
- Agreed Value: Many classic car insurance policies cover vehicles for an agreed value rather than the market value. This means insurers and owners agree on a specific value for the car when setting up the policy, which can also help lower the cost of the insurance.
- Driver’s Age: Classic car policies often have minimum age requirements for drivers, typically around 25 years of age, which can help reduce risk, as older drivers tend to have fewer accidents.
However, it’s essential to remember that while classic car insurance can be cheaper, it does come with restrictions such as mileage limits and stipulations about where and how the car can be used. It’s crucial to understand these limitations before deciding if classic car insurance is the right choice for your vehicle.
When does a car become a classic?
In the UK, for tax purposes, a car becomes a ‘classic’ when it is 40 years old. This is known as the ‘Historic’ tax class. if your vehicle is over 40 years old, it is exempt from both the annual road tax (Vehicle Excise Duty) and the requirement for an annual MOT test, although you must still ensure it is in a roadworthy condition at all times.
However, for insurance purposes, the definition can be different. Many insurance companies define a classic car as one that is over 20 or 25 years old, but this can vary by provider.
Car clubs and enthusiasts may have their own definitions of what makes a car a ‘classic’. It’s important to note that not all old cars are automatically considered classics by the enthusiast community – factors such as rarity, historical significance, and condition can also contribute to a car’s classic status.
Remember to always check the specific rules and requirements with the relevant authorities or organisations, as they can change over time or have additional conditions.
Types of classic car insurance cover
Classic car insurance, sometimes also referred to as collector car insurance, offers specialized coverage designed for the unique needs of classic and vintage cars. Here are several types of cover you might find in a classic car insurance policy:
- Agreed Value Coverage: Standard car insurance policies usually pay out the actual cash value of the car at the time of a claim, which takes into account depreciation. However, classic cars often appreciate in value over time. Agreed value coverage is when the insurer and the policyholder agree upon the car’s value when the policy is written. If the car is totalled, the policyholder will receive that agreed amount.
- Limited Usage: Classic cars are typically driven less frequently than everyday cars – they may be used for car shows, exhibitions, parades, or just occasional pleasure drives. As such, many classic car insurance policies incorporate a limited usage clause, which can reduce the premium.
- Roadside Assistance: Some insurers offer specialized roadside assistance programs designed for classic cars. This can include guaranteed flatbed towing with soft straps to help prevent any damage during transport.
- Restoration Coverage: Classic cars often undergo periods of restoration and repair. Some classic car insurance policies offer coverage that specifically protects the car while it’s being restored.
- Spare Parts Coverage: This provides coverage for spare parts you may have for your classic car, recognising that these can often be rare and expensive.
- Car Show Expenses: If you take your classic car to shows and it’s damaged, some policies cover costs associated with missing the show due to the damage. Some policies also cover the costs of emergency repairs at a car show.
- Travelling Coverage: This provides coverage for costs related to travel or accommodations if your classic car breaks down far from home.
Do classic cars require an MOT?
In the United Kingdom, the rules for MOT testing for classic cars changed in 2018. According to these rules, vehicles that are more than 40 years old and haven’t been substantially changed in the previous 30 years are exempt from needing an MOT test. This exemption is based on the assumption that classic car owners tend to keep their vehicles in good condition.
However, this doesn’t mean maintenance and safety checks aren’t necessary. It’s still the owner’s legal responsibility to ensure that the vehicle is kept in a roadworthy condition at all times when it’s being used on public roads. Failure to do so can result in fines and penalty points on your driving licence.
Furthermore, if modifications have been made to the vehicle, especially changes to the chassis, axles, or engine, this could mean the vehicle is considered substantially changed, and thus not eligible for the MOT exemption.
While the MOT exemption can save classic car owners time and money, many choose to voluntarily submit their vehicles for an MOT to ensure their classic car meets safety standards. Always double-check MOT requirements to stay within the law.
List of different types of classic cars
Here are some examples of classic cars that have been popular in the UK:
- Aston Martin DB5: Known as the quintessential James Bond car, the DB5 has become an icon of British automotive design.
- Jaguar E-Type: This model, also known as the XK-E, is often hailed as one of the most beautiful cars ever made.
- Mini Cooper: The original Mini Cooper, not to be confused with the modern iterations, is a quintessential British classic.
- Rolls-Royce Silver Shadow: The epitome of luxury in its day, the Silver Shadow is now a classic status symbol.
- MG B: One of the best-selling sports cars in history, the MGB is a popular choice for classic car enthusiasts.
- Ford Escort Mexico: This performance version of the Ford Escort is a favourite among classic car lovers.
- Austin-Healey 3000: This British sports car is often sought after for its combination of performance and style.
- Triumph Spitfire: Known for its distinctive design, the Spitfire is a classic British roadster.
- Land Rover Series I, II, and III: These vintage 4x4s are classic examples of British engineering and design.
- Vauxhall Victor: This classic car was immensely popular in its time and now holds nostalgic appeal.
It’s important to note that “classic” is a somewhat subjective term and different people might have different ideas of what constitutes a classic car. Some might consider only pre-war cars to be true classics, while others might include more recent, but still vintage, models.
ABI – Association of British Insurers – The Association of British Insurers is the leading trade association for insurers and providers of long term savings. … need to contact their insurer for a Green Card which they will need to carry on them if they wish to drive their vehicle in the EU.
BIBA – British Insurance Brokers’ Association – The British Insurance Brokers’ Association (BIBA) is the UK ‘s leading general insurance organisation.
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