The state of Michigan has long been associated with the motor vehicle industry — Detroit is known as the “Motor City,” after all. But with the economy struggling and prices for everything going up, Michigan residents are finding themselves struggling when it comes to their automobiles. Michigan is on record as the state with the highest insurance premiums in the US, and thanks to inflation and ongoing supply chain disruptions, cars are more expensive than ever to buy — meaning more and more people are hanging on to their cars longer.
Conventional wisdom says that older cars cost less to insure — but is that really true? And if so, what can Michigan drivers do to make the most of it?
What’s Affecting Michigan Car Insurance?
So, exactly how high is Michigan car insurance compared to the rest of the country? Ross Martin from insurance comparison siteThe Zebra has some shocking numbers: the average motorist in Michigan pays a whopping $2,639 per year for car insurance — a full 73% higher than the rest of the country!
Before we dig into the specifics of vehicle age and insurance premiums, let’s look at some of the most common factors that affect how much you pay for auto insurance.
The first and most impactful factor is your driving record. A clean driving record can be a major asset when it comes to your car insurance, earning you good driver discounts and bringing those premiums down. On the other hand, a record of accidents, violations, or DUIs can quickly send your premiums into the stratosphere.
Age and driving experience also play a major role — teenage drivers are some of the most high-risk motorists there are, and have insurance premiums to match. A history of frequent insurance claims can also play a part in costing you more for auto insurance, as your insurer may come to see you as more of a risk.
Vehicle Age and Auto Insurance Costs
Are older cars cheaper to insure? In almost all cases, yes — and the reason why is depreciation. Older vehicles lose their value on the market as they get older, and often, replacement and repair costs drop along with them. Since those costs are one of the major factors in determining insurance rates, older cars are ideal for money-conscious drivers looking to pay less for their car insurance. However, those savings will hit a wall eventually — more on that below.
When it comes to older cars, however, your insurance bill is not the only consideration to keep in mind. Older vehicles present some other pros and cons when it comes to expenses. First, while older vehicles might lack some of the technological amenities (like GPS and additional safety features), they’re often much more affordable to repair. Parts for older vehicles tend to be cheaper and more widely available.
On the downside, older cars are more likey to require frequent repairs, as wear and tear takes its toll. Frequent repairs could offset the savings from reduced insurance premiums, meaning you may eventually have to weigh one against the other and decide whether that old “beater” is worth keeping.
An intermediate step many drivers take when it comes to their older vehicles is dropping collision and/or comprehensive coverage in favor of liability insurance only. This comes down to the difference between your car’s value and the insurance deductible. If something should happen, such as accident or theft, you may find your deductible is larger than the value of the car, which somewhat defeats the purpose of insuring it in the first place.
One of the easiest ways to avoid this is to drop comprehensive coverage (which covers things like theft, vandalism, and natural disasters) and collision coverage. This leaves only liability insurance, the bare minimum in most states, meaning your premiums will stay low, but you won’t get any compensation for repairs or replacement should the car be damaged or totaled.
Finding the Best Cheap Car Insurance in Michigan
With Michigan’s premiums being as high as they are, it can take some work to find cheap Michigan car insurance. However, there are a few strategies you can employ to either help keep your premiums down, or find a better deal elsewhere.
First, don’t be afraid to shop around and compare. There are plenty of free online tools that help you compare car insurance quotes and find an affordable policy that works for you. You might also consider asking your existing insurer about what discounts you might qualify for. Finally, as previously mentioned, the easiest way to keep your insurance rates low is to drive safely, avoid traffic violations, and keep your driving record clean.
Michigan drivers are facing some unique challenges when it comes to affordable car insurance, which is not that easy to come by. But with some diligence and footwork, it’s possible to find a more affordable policy that still gives you all the coverage you need.
