just paid off car

[irmanator]

it is a 2004 dodge neon. when is recommended time to cancel collision?

[kork13]

Congrats on the payoff, I did the same on mine ~6 weeks ago. I'm sure you feel the same as I did, that it's great to have that payment off your back...

As for when to go liability-only, I know there's a comparison of when your insurance is a certain percentage of your car's value... I forget it at the moment, but someone here must know it....

Otherwise, I would say once your car's value is below, say, $3k, it's probably not worth having anything beyond than liability on it. If you wreck it, you'll be out $1k tops, having saved the rest from lowered insurance payments (assuming you don't wreck it within 2 yrs or so)--you'll generally cut your insurance bill by 60% (at least) by going to basic liability.

[creditcardfree]

Congrats! You stop paying collision when you are okay with the fact that if something were to happen to your car and it was totalled....you would get zero for it.

[GREENBACK]

Congrats for sure. I paid off two in the last few years and recently went with liability on both. I can replace either if needed and one isn't driven much. I don't know about the percentage to go with but when I'm comfortable that I could replace the vehicle w/o any particular hit to my personal finances I go with collision. I go with that as my comfort level but others may think differently.

[Fizgig]

Congrats! I paid mine off yesterday and am THRILLED.

I'm not a fan of liability only, unless the savings would be high and you have the cash in the bank to replace the car with minimal headache.

A year and a half ago I had a paid off '97 mustang worth about $3k in private sale. Dropping my coverage would have saved $200/year, and I opted to keep paying just for piece of mind. When a hit-and-run totalled it, I was very happy with that decision. They gave me $4500 for it which helped purchase my new car.

[red92s]

You know what paying off a car means, right?

TIME TO GET A NEW ONE!











I kid, I kid.

[emilywebster07]

Awesome great job!!!

[adam_c]

Congratulations on paying off your car. Generally, you would look at the current value of the car compared to the premium difference.

For instance, I have a 2000 Oldsmobile. Currently worth about $1,500 give or take. The difference in premium between full coverage and liability is about $30/month, $360 a year. It isn't a daily driver. It's just a spare vehicle.

So I'm looking at paying over 20% of the car's value in premium every year. Not worth it to me.

Other considerations; is this your primary transportation? If you lost it tomorrow, can you replace it out of pocket? If not, then you would really want to keep the full coverage. The element of risk involved at that point would be more than I would want to accept.

Good luck.