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Imagine getting a note like this:
“Mom is 84 and hasn’t driven in a year, not since her hip surgery. Her car just sits in the garage, but she’s still paying about $1,900 a year to insure it. Can’t she just cancel the policy?”
Let’s say it came from a reader named Karen. Karen isn’t real; I made her up. But her dilemma lands in a lot of families sooner or later.
The CDC counts almost 52 million licensed drivers 65 and older as of 2022. (1) And a 2002 study in the American Journal of Public Health estimated that drivers ages 70 to 74 had a driving life expectancy of about 11 years. (2)
For many families, the question isn’t whether this day comes, but what to do when it does.
I’ve been a CPA since 1981 and writing about money for more than 35 years. Karen’s instinct is right: paying for full coverage on a car nobody drives doesn’t make sense. But canceling the wrong way can cost more than it saves.
In New York, for example, a registered vehicle must be insured even when it’s in storage or not being driven. (3) Let coverage lapse, and the registration can be suspended, with civil penalties of $8 to $12 a day. (3)
Here’s how to do it right.
1. Decide the car’s future, then price that
Is Mom likely to drive again? Will a grandchild use the car? Will it be sold? Each answer calls for different coverage, so settle that question first.
If the car stays registered and parked, ask the insurer what your state requires and what can be trimmed.
Comprehensive coverage pays for theft or for damage from something other than a collision, like fire, flood, vandalism or hail. (4) For a car that never leaves the garage, that’s the coverage I’d want to keep, providing the car is still valuable, along with whatever your state requires.
Whoever ends up insuring the car, a change in drivers or an upcoming renewal is a natural time to compare quotes. Insurify lets you compare car insurance quotes side by side, and it costs nothing to check.
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2. Don’t cancel before you handle the plates
Rules vary by state. In New York, the DMV says to turn in the license plates before your coverage ends. (3) Skip that step, and you’re looking at a suspended registration and daily penalties. (3)
So call your state’s motor vehicle agency first and ask what it requires when a car comes off the road. Then call the insurer. In that order.
3. Turn the savings into rides
Here’s the part families forget. Mom still needs to get to the doctor, the grocery store and her friends’ houses.
Take what she was spending on insurance, gas and upkeep and set it aside for rides: a cab or rideshare, a local senior transportation service or gas money for the grandchild who drives her. Giving up the keys shouldn’t mean giving up her independence.
For some families, giving up the car is also the first sign that Mom will need more help at home, and that help can get expensive.
According to government data, about 7 in 10 people turning 65 will need some form of long-term care. And Medicare doesn’t cover custodial care — the day-to-day help with things like bathing and dressing — which can leave families facing six-figure bills that eat into retirement savings.
Long-term care insurance helps fill that gap, covering services like home care, assisted living, and help with daily tasks. Rates are typically lowest if you buy in your 50s or early 60s, couples often qualify for discounts, and premiums may even be tax-deductible.
A little planning now can spare your family a difficult financial situation later.
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4. Giving the car to a grandchild? Do the paperwork
A car is a gift like any other. For 2026, the IRS annual gift tax exclusion is $19,000 per person. (5) If the car’s fair market value, plus anything else Mom gives that grandchild this year, stays under that amount, the gift fits under the exclusion.
Transfer the title properly, and make sure the new owner has a policy in place before Mom’s ends. You don’t want any question about who’s responsible for that car landing on Mom.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
5. Selling? Same order of operations
Selling may be the cleanest answer. Mom gets cash, and the insurance and registration bills go away.
But keep the policy until the sale is final and the plates are handled under your state’s rules. In New York, for example, that means turning in the plates before coverage ends. (3) Then cancel, and ask the insurer whether any unused premium is coming back to her.
My take
Karen’s right that Mom shouldn’t pay for coverage a parked car doesn’t need. But the order matters: decide the car’s future, check your state’s rules, then change the policy.
Handle it that way, and Mom keeps her money, her record stays clean and nobody gets a surprise letter from the DMV.
Losing the car keys is hard enough. Losing money on the way out is optional.
Sources: 1. Centers for Disease Control and Prevention; 2. American Journal of Public Health (via EconPapers); 3. New York State DMV; 4. Insurance Information Institute; 5. IRS
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