Way to Save #57: Cancel Your Car Coverage

This may seem like a strange idea, but if the cost of your annual comprehensive/collision coverage is more than 10% of the value of your car, you could consider dropping it. (Obviously you should never under any circumstances drive without liability!) For example, if you’re paying $500 in comp/collision premiums to cover a car that’s only worth $5,000, you’re at the 10% threshold. If the potential loss of $5,000 worth of car is worth not spending $500 every year, consider dropping the coverage. This is only an option if you don’t have a loan on the car, since lenders require you to maintain full coverage to protect their collateral.

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