Classic Car Insurance: Protect Your Favourite Asset
Want to know if you qualify for classic car insurance for your latest and greatest toy? You need to protect your pride and joy, covering yourself from possible heartache. Only those fortunate few who own a classic car can understand the bond between an owner and their car. It’s the feeling you experienced when you first bought it and drove her home, grinning all the way.
In this guide, we’re going to focus on classic car insurance to make sure you don’t take any wrong turns. We’ll start by looking at the classic car definition, so you know whether you can take out this specialist insurance. There are many benefits to classic car insurance if you qualify, including tax exemptions and cheaper insurance because it’s an older car. Yes, you read that right! Hop in and let’s warm up the engine.
Classic car definition
There are various classic car definitions out there, depending on the company or organisation’s point of view. This means your car may qualify for classic car insurance with one insurance company and not another. That’s good news because it means you can shop around if the first tyre doesn’t fit.
The classic car moniker is usually based on the age and value of a car. A 30-year-old car worth £1,000 due to depreciation won’t make the cut. It’s about age and beauty. If someone isn’t taking the time to polish her, it’s probably not going to fit the classic car definition. A classic car is one that appreciates in value because it is timeless and precious.
The HMRC definition of a classic car is “one where the age of the car at the end of the year of assessment is 15 years or more and the market value of the car for the year is £15,000.”
However, different insurance companies have their own classic car definitions you’ll need to adhere to. Here is a sample of some of the rules that apply for the vehicle to qualify:
- Must be a minimum of 15 years’ old (some insurers specify older though). For example, some insurance companies even require the car to be over 35 years’ old. Usually, there is an upper age limit too e.g. must be under 70 years old.
- While there may be a minimum value imposed by classic car insurers, there can also be a maximum, e.g. £40,000.
- For insurance purposes, there will be a limit on the number of miles you can drive annually. After all, this car is not expected to be the workhorse of the family. Would you take your classic to Ikea or even the local shops on a regular basis? For this reason, there is a maximum number of miles written into the policy, usually under 5,000 miles per year.
If you go over the number of miles specified in your policy, your insurance could be void. If you are nearing your limit and think you will go over, contact your provider and ask if they will allow an extension to your existing policy.
Classic car tax exemption: do you need to pay road tax?
We all know that there are only two things certain in this life: death and taxes. Well, there’s usually no avoiding taxes and mastering accountancy can drive you around the bend. However, for those lucky enough to own a classic car built before 1 January 1979, you will qualify for the classic car tax exemption.
This is great news because it means that you don’t need to pay vehicle/road tax. You will still need to keep your vehicle’s road tax up to date though, you just won’t have to fork out to do so.
Even if your car was built before 1 January 1979, you will not be exempt from paying vehicle tax if the car:
- Is used for hire or reward (e.g. you earn money using it as a taxi).
- Is used for a trade or a business.
Join a classic car club and save on your insurance
By becoming a member of a classic car club, insurers will often give you a discount on your insurance of up to 15%. It shows that you are passionate about your vehicle and will most likely want to take extra special care of it!
This is obviously something that insurers appreciate because anyone who loves their car as much as you, will try their hardest not to get a scratch on it.
If you haven’t experienced a classic car club before, you can find location-based ones and others that are dedicated to a particular make or model.
As well as saving on your car insurance, you can usually benefit from other discounts, including entry to car shows and even on spare parts. Not to mention you get to meet other like-minded enthusiasts and spend time talking about your car.
A benefit of owning an older car: cheaper insurance
Yes, you read that right. There are many benefits that come with owning an older car: cheaper insurance, vehicle tax exemption (as we mentioned above), the prestige and excitement, and let’s not forget the car itself. Taking that slow Sunday drive or meeting up with your mates at your classic car club will make you think the car has more than paid for itself.
Classic and older cars cost less to insure because they are usually not driven as much as normal runabout cars. This decreases the chances of having an accident, lowering your premium.
It’s also cheaper because these cars are precious and should be taken care of. Most owners are usually more than happy to oblige. It’s typical that these cars are locked overnight in garages and wouldn’t be seen dead in a supermarket car park.
Depending on how expensive the value of the car is though, insurance could start increasing again though. This is because the more expensive the car, the fewer policy options you will have and obviously the risk of paying you out is greater. There is a world of difference between a classic and an old banger. The value of the vehicle will play a large role in the premium you pay, as we will discuss in the next section.
Classic car insurance quote
We’ve told you it is usually cheaper so now we’re going to run some classic car insurance quotes for you. This will give you an idea of what to expect. Please remember, there are many factors that will impact the price you pay, including:
- The age of the driver.
- The value of the vehicle.
- Where the vehicle is parked.
- The city you live in.
- How long the driver has held their licence and if the no claims bonus applies.
- If the car has a tracking device.
- How many miles the vehicle does per year.
Furthermore, there are three policy types to choose from, which you find in standard car insurance too. These range in price below from least to most expensive:
- Third party - This is the minimum level of cover that any driver is required to hold. This will cover other people in an accident deemed to be your fault, but not you or your vehicle.
- Third party, fire and theft - This offers the same protection as third party with the added benefit of covering your car if it’s stolen or damaged after a fire or attempted theft.
- Fully comprehensive - On top of both the above benefits, this will also cover you and your vehicle if you cause an accident.
For the quote we ran, we went with comprehensive cover as this gives you the best level of protection for you and your car. Here are some of the other key details we chose for the quote, including car type:
- Make and model - Alfa Romeo 75, 1779cc Petrol, 4DR, Manual.
- Paying annually (as opposed to monthly instalments).
- Total annual mileage cap - 5,000.
- Driver details - 40 years old with 10 years’ no claims bonus, living in London.
- Car usage - Parked in a locked garage overnight and used for social, domestic and pleasure only.
Based on these details, we received the following prices and policy offerings:
| Provider | Excess | Personal Accident | Courtesy Car | Breakdown | Premium |
|---|---|---|---|---|---|
| Performance Directo.co.uk | £375 | Included | Included | Can add for £49.00 a year | £188.52 |
| Grove Dean Private Clients | £375 | Included | Included | Included | £211.54 |
| One Call Insurance | £250 | Included | Included | Included | £879.86 |
| Lancaster Insurance | £250 | Can add for £19.95 a year | Included | Can add for £14.95 a year | £910.47 |
As you can see from the figures above, the prices and benefits included vary across providers. You should always shop around to make sure you get good value for money. This doesn’t always mean choosing the cheapest policy available, although this may be the best option. We’ll assume that you’ve invested a lot of time, energy and money in your car, so you want to know it’s protected in any circumstance.
In the next section we will look at some nuances specific to classic car insurance you need to know about.
Classic car insurance: policy considerations
As we mentioned earlier, many of the options and benefits offered under classic car insurance are the same as standard car insurance.
After all, there are a few big events that everyone needs to be insured for and the rest is adding the gold plating to the policy.
Here are some of the main things to watch out for when choosing a policy:
- If you have a genuine classic car, which is a sought after brand you will expect the value to increase steadily (this probably won’t apply to the old family wagon that’s been handed down for generations). If you are in this fortunate position, you should watch out for policies agreeing to pay ‘market value’ in the event that it’s written off or stolen. You should get an industry professional to value it for you and have this written into the contract.
- Insurers have different policies on replacement parts for vehicles. It’s essential for a classic car that you get authentic replacements, should the need arise. Check the policy or call the insurer if you aren’t sure where to find this section.
- Check that the policy permits you to attend car shows and that you’re covered driving from your house to shows too.
- Perhaps your car has retired voluntarily (or otherwise) and you keep it safe in your garage or yard. If you aren’t planning on driving your car, you can still get insurance to protect it from fire, damage and theft. If you want to take your vehicle off the road permanently and stop taxing and insuring it, you need to complete a SORN (statutory off-road notification).
We hope you have found this guide useful. The main takeaway is to shop around and find an insurer that values your car as much as you do. If you use a comparison service you can easily find out who is willing to insure your car based on the company’s criteria. Then it’s a matter of deciding which is the right policy for you and your shiny toy.
All material on this page and the selectra.co.uk website is for information purposes only and does not constitute any form of financial advice. Selectra.co.uk is not responsible for any consequences that might arise from your use of the information provided.