When considering a purchase of a classic car, you may think of the high price of your current car insurance as a deterrent. However, a classic car with a value of $10,000 may be insured for as little as $110 a year! Lucky for us, there are several companies that specialize in insurance specifically for classic cars. The insurance cost for most classic cars is much lower than your new daily driver. However, as a general rule, you insure your classic car based on the criteria below.
Routine Driving: You cannot use the classic car as your daily driver and for doing errands etc. Most insurance companies require proof of existence of the car you will use for regular driving.
Mileage Restriction: Generally you may drive around 2,500 miles per year. This is pretty reasonable. You do not want to drive your classic car in inclement weather conditions anyway. Driving 2,500 miles per year from April to October averages around 90 miles per week of enjoyment.
Storage: The classic car must be stored in a locked garage, preferably on your premises.
The insurance company may make exceptions for the storage being away from your house, but it will still generally need to be housed in a safe, secure storage area.
There is also a difference in the value that your car is insured for versus a typical new car.
Try to find an insurance company that offers an Agreed Value policy. Most standard policies will pay either a Actual Cash Value (replacement cost, minus depreciation) or Stated Value (the insurer is obligated to pay "up to" the amount stated on the policy) in the case of a total loss. However, an Agreed Value policy pays the full, insured vehicle value with no depreciation (minus any deductible, if applicable) in the event of a total loss. Each company has different criteria, so please check directly with them for details.
License plates can also be less expensive than you are used to paying for your newer vehicle. Considering the age of the vehicle, some states charge you for the weight of the vehicle versus the value if you are considering a standard plate. Also, many states offer a historical plate that is a multi-year registration and can provide a huge savings over using a standard plate. However, a historical plate may have restrictions such as driving only to car shows and parades. Please check with your Secretary of State office for the regulations concerning obtaining a historical license plate.
If you think the above policies concerning classic car insurance and plates is too restrictive,
You can always have the car insured with your regular insurance company and buy a regular plate. That way you will not be restricted in any way for the mileage and use of the car. But be prepared to pay a higher amount for your insurance and expect a possible less favorable settlement in case of a total loss of your vehicle. The best of both worlds usually is to buy car insurance from a classic car specialist and buy a regular license plate if your state has too restrictive of a historical plate usage.