3 ms·

I'm curious about the insurance aspect of this, do people buying $1000 cars forego insurance?

by Synthetic7346 22d ago

JohnFen 22d ago
I just carry liability. There's no point in comprehensive coverage on such a car. My car insurance costs about $500/yr.
- encrypted_bird 21d ago
  Jesus, only $500 a *year*?? May I ask where you live in? I live in MI and I pay about $990 a year for minimum liability insurance.
  - JohnFen 20d ago
    I live in the west. I also have an excellent driving record and drive a small econobox. Here's an interesting story that gave me greater understanding of how insurance is priced. Years ago, I worked at a place where I lived 5 miles away as the crow flies. However, due to geography, the only way to get between my work and my home was by car, using one of the most dangerous freeways in my state. I got tired of the commute and moved closer to work, close enough that I didn't have to use the freeway (or even drive unless I was lazy) anymore. I reported the change of my residence to my car insurance company, and they cut my premium by a third. They didn't say why, but I'm certain the reason was that I didn't take that freeway 10 times per week anymore.
    - encrypted_bird 20d ago
      Damn that's a big difference!
      - JohnFen 19d ago
        I was genuinely shocked and it made me happier with my car insurance company. The behavior I expected is that they'd keep my premium the same and just pocket the extra profit. Of course, them doing this may earn enough loyalty and goodwill that they benefit more from being honest than from being overly greedy. I do wonder if the same thing would have happened if I carried comprehensive rather than liability. I suspect not. They may see liability-only policies as an indicator that the customer is of limited means.
omgwtfbyobbq 22d ago
Usually, normal insurance is reasonable, or if it's not, you get liability only because the difference in cost is enough to buy another car after a few years. Unfortunately there's a fair bit if industry built around charging people who are stretched financially more, but it's possible to avoid that.
- hn993302 22d ago
  Having more wealth if anything has had me buy less insurance. My newer car is liability only. Worst case if it blows up, I can afford a cheap replacement that I've already more than saved up for by not paying full coverage. Also, that $4K cash for clunkers was a lot. I agree with the author, that would've totally gone into my pocket if they did it today. I still have my old car from college that's worth about $500 now, purchased for $1500, and I don't need it.
  - omgwtfbyobbq 22d ago
    My insurance is getting to the point where I might do the same. My car is worth maybe a third of what it was new, and my monthly insurance bill is the same, it's nuts. I may go with a significantly higher deductible as a compromise.
  - yojo 22d ago
    If you can afford to eat the loss, don’t insure it. Obviously insurance companies make money on average for every policy. If they didn’t, they would go bankrupt. So on average, every time you buy insurance, you lose. So insure only what’s required by law, or things that would throw your life off track if they vanished.
    - hn993302 22d ago
      Yep. Which is also why I find vision insurance ridiculous. No it doesn't cover me going blind, it covers a pair of glasses at best, more like 25% of one.
      - 21d ago
hn993302 22d ago
Supposedly about 20% of drivers in El Paso are uninsured, so yes?
- firesteelrain 22d ago
  Texas needs to be stricter about this and start suspending licenses
  - hn993302 22d ago
    It's higher in Los Angeles. And I don't know if they have licenses. What I've heard is if they get in an accident and can't drive away, they run away on foot and report the car stolen. And I guess they don't get pulled over because there aren't ALPRs or cops are ignoring the hits? I had my insurance lapse for 1 day and they still pulled me over a week later off a stale list, so idk.
  - trollbridge 22d ago
    Suspending licences doesn't stop people from driving anymore than not having insurance doesn't.
    - firesteelrain 22d ago
      It’s a deterrence and enforcement mechanism. Because if you get pulled over, you might go to jail in some states.
      - vel0city 21d ago
        And then we start throwing people in prison because they were too poor to legally go get groceries or go to work. Car-dependent city design a travesty, grossly hurting the poor. You shouldn't need to pay insurance and operate an expensive machine just to live. And yet at the same time I see uninsured driving as a really bad and extremely selfish crime. You're risking seriously messing up someone else's life to save some small amount of money every month.
doubleg72 22d ago
They typically carry liability
dghlsakjg 22d ago
At that tier you buy minimum coverage liability. That coverage is pretty cheap, but even so, many choose to risk it.
Dig1t 22d ago
I drove a $1000 car for a long time back in my poor days. You could get minimum liability insurance for $50/month or even less. Just whatever you needed to be able to drive legally. Thankfully I was never in any crashes but I always drove with the expectation that crashing would be financially ruinous and tried to be extra careful.
wildzzz 22d ago
You get the absolute bare minimum required by your state, it basically just covers the other driver you hit. It's pretty awful since if you are badly injured beyond what their underinsured driver's coverage is for, you're likely not going to get a lot of money. You'll definitely get everything their policy states but the remainder comes out of your own uninsured motorist coverage and health insurance. People that buy bare minimum coverage typically don't have a lot of assets so there'll be nothing to recover from them directly.
- marssaxman 21d ago
  I buy bare minimum coverage because it has been my experience that you end up screwed in the event of a collision no matter what kind of insurance you have. Insurance companies are in the business of taking your money now and finding every possible excuse not to give it back later; I'd rather keep it in my own pocket. This is part of the reason I prefer inexpensive cars: buying only what I can afford to pay for outright means there is no loan which would obligate me to carry a comprehensive insurance policy.
- hn993302 20d ago
  Probably not even that.
jjav 21d ago
You can't legally forego insurance (at least in the USA). But comprehensive insurance is silly to pay for an old car so you buy only liability so it's a lot cheaper.

I'm curious about the insurance aspect of this, do people buying $1000 cars forego insurance?

JohnFen 22d ago

I just carry liability. There's no point in comprehensive coverage on such a car. My car insurance costs about $500/yr.

encrypted_bird 21d ago
Jesus, only $500 a *year*?? May I ask where you live in? I live in MI and I pay about $990 a year for minimum liability insurance.
- JohnFen 20d ago
  I live in the west. I also have an excellent driving record and drive a small econobox. Here's an interesting story that gave me greater understanding of how insurance is priced. Years ago, I worked at a place where I lived 5 miles away as the crow flies. However, due to geography, the only way to get between my work and my home was by car, using one of the most dangerous freeways in my state. I got tired of the commute and moved closer to work, close enough that I didn't have to use the freeway (or even drive unless I was lazy) anymore. I reported the change of my residence to my car insurance company, and they cut my premium by a third. They didn't say why, but I'm certain the reason was that I didn't take that freeway 10 times per week anymore.
  - encrypted_bird 20d ago
    Damn that's a big difference!
    - JohnFen 19d ago
      I was genuinely shocked and it made me happier with my car insurance company. The behavior I expected is that they'd keep my premium the same and just pocket the extra profit. Of course, them doing this may earn enough loyalty and goodwill that they benefit more from being honest than from being overly greedy. I do wonder if the same thing would have happened if I carried comprehensive rather than liability. I suspect not. They may see liability-only policies as an indicator that the customer is of limited means.

omgwtfbyobbq 22d ago

Usually, normal insurance is reasonable, or if it's not, you get liability only because the difference in cost is enough to buy another car after a few years. Unfortunately there's a fair bit if industry built around charging people who are stretched financially more, but it's possible to avoid that.

hn993302 22d ago
Having more wealth if anything has had me buy less insurance. My newer car is liability only. Worst case if it blows up, I can afford a cheap replacement that I've already more than saved up for by not paying full coverage. Also, that $4K cash for clunkers was a lot. I agree with the author, that would've totally gone into my pocket if they did it today. I still have my old car from college that's worth about $500 now, purchased for $1500, and I don't need it.
- omgwtfbyobbq 22d ago
  My insurance is getting to the point where I might do the same. My car is worth maybe a third of what it was new, and my monthly insurance bill is the same, it's nuts. I may go with a significantly higher deductible as a compromise.
- yojo 22d ago
  If you can afford to eat the loss, don’t insure it. Obviously insurance companies make money on average for every policy. If they didn’t, they would go bankrupt. So on average, every time you buy insurance, you lose. So insure only what’s required by law, or things that would throw your life off track if they vanished.
  - hn993302 22d ago
    Yep. Which is also why I find vision insurance ridiculous. No it doesn't cover me going blind, it covers a pair of glasses at best, more like 25% of one.
    - 21d ago

hn993302 22d ago

Supposedly about 20% of drivers in El Paso are uninsured, so yes?

firesteelrain 22d ago
Texas needs to be stricter about this and start suspending licenses
- hn993302 22d ago
  It's higher in Los Angeles. And I don't know if they have licenses. What I've heard is if they get in an accident and can't drive away, they run away on foot and report the car stolen. And I guess they don't get pulled over because there aren't ALPRs or cops are ignoring the hits? I had my insurance lapse for 1 day and they still pulled me over a week later off a stale list, so idk.
- trollbridge 22d ago
  Suspending licences doesn't stop people from driving anymore than not having insurance doesn't.
  - firesteelrain 22d ago
    It’s a deterrence and enforcement mechanism. Because if you get pulled over, you might go to jail in some states.
    - vel0city 21d ago
      And then we start throwing people in prison because they were too poor to legally go get groceries or go to work. Car-dependent city design a travesty, grossly hurting the poor. You shouldn't need to pay insurance and operate an expensive machine just to live. And yet at the same time I see uninsured driving as a really bad and extremely selfish crime. You're risking seriously messing up someone else's life to save some small amount of money every month.

doubleg72 22d ago

They typically carry liability

dghlsakjg 22d ago

At that tier you buy minimum coverage liability. That coverage is pretty cheap, but even so, many choose to risk it.

Dig1t 22d ago

I drove a $1000 car for a long time back in my poor days. You could get minimum liability insurance for $50/month or even less. Just whatever you needed to be able to drive legally. Thankfully I was never in any crashes but I always drove with the expectation that crashing would be financially ruinous and tried to be extra careful.

wildzzz 22d ago

You get the absolute bare minimum required by your state, it basically just covers the other driver you hit. It's pretty awful since if you are badly injured beyond what their underinsured driver's coverage is for, you're likely not going to get a lot of money. You'll definitely get everything their policy states but the remainder comes out of your own uninsured motorist coverage and health insurance. People that buy bare minimum coverage typically don't have a lot of assets so there'll be nothing to recover from them directly.

marssaxman 21d ago
I buy bare minimum coverage because it has been my experience that you end up screwed in the event of a collision no matter what kind of insurance you have. Insurance companies are in the business of taking your money now and finding every possible excuse not to give it back later; I'd rather keep it in my own pocket. This is part of the reason I prefer inexpensive cars: buying only what I can afford to pay for outright means there is no loan which would obligate me to carry a comprehensive insurance policy.
hn993302 20d ago
Probably not even that.

jjav 21d ago

You can't legally forego insurance (at least in the USA). But comprehensive insurance is silly to pay for an old car so you buy only liability so it's a lot cheaper.