Classic Car Insurance: A Budget-Friendly Option?
Car insurance premiums are increasing. However, owners of vintage vehicles may find themselves paying significantly less. According to the Association of British Insurers, during the final quarter of 2024, the typical annual cost of car insurance in the UK reached £621—a 15% year-over-year increase. This rise occurred “against a backdrop of total claims payouts that were 17% higher in 2024”.
However, the classic car market presents a different story when it comes to insurance premiums. The cost of insuring a classic car can offer considerable savings compared to standard policies.
What Defines a Classic Car?
Determining when a car qualifies as a classic isn’t straightforward, according to CompareTheMarket. Some consider classic status based on timeless design or technological and nostalgic appeal.
If using the 1984 car tax exemption date as a benchmark, vehicles over 40 years old automatically qualify as classics, even if they aren’t particularly sought after, explained CompareTheMarket.
HMRC (Her Majesty’s Revenue and Customs) classifies a car as classic if it’s over 15 years old and has a market value exceeding £15,000, according to Howden Insurance. Nonetheless, some insurers require a car to be 25 or 30 years old to be eligible for classic car insurance.
Uswitch noted classic cars can range from an Aston Martin or a vintage Porsche to any make of car older than 15 years. So, it’s possible to be driving a classic vehicle without even realizing it.
Carwow notes most classic car insurance policies begin once a car is at least 20 years old, and they are usually much more affordable than people expect.
The Cost of Classic Car Insurance
Go.Compare indicates that classic car insurance is often more economical than standard insurance due to vintage vehicles being well-maintained, safely stored, and driven less frequently.
These policies are designed for drivers who use older cars infrequently and mainly for leisure, according to MoneySavingExpert. They typically do not cover daily commutes or regular school runs.
Coverage options, similar to standard car insurance, include third-party, third-party fire and theft, and fully comprehensive cover. Which? also points out that classic car policies often include an agreed valuation. This is a pre-arranged amount your insurer pays out if your car is deemed a total loss.
Additionally, “laid-up cover” is available at a lower cost. This covers vintage vehicles that are not driven on the road but still require protection against damage, fire, and theft.
Reducing Classic Car Insurance Costs
Howden highlights there is no one-size-fits-all pricing for classic car insurance. Insurance costs depend on factors such as the car’s value, age, and your claims history.
Uswitch added that classic cars lack the security features of modern vehicles. Installing an alarm or immobilizer can enhance security. However, you should check with your insurer about its impact on your premium.
MoneySavingExpert noted that standard car insurance tips, such as keeping your car in the garage and reducing its mileage, are also applicable to classic cars. Furthermore, joining a car club could potentially reduce insurance costs by up to 25%.
Go.Compare suggests car club membership is seen as evidence that you are committed to taking good care of your car.
SlashGear suggests that some insurers may require owners to keep the car in a garage or to limit mileage. Despite these requirements, premiums can provide substantial savings when compared to traditional insurance.
