Originally Posted By: eljefino
Also if it gets whacked the liable party will pay, unless you have some goofy no-fault type law. So you're paying $35/mo against yourself wrecking it.
This is an important point. There are really three scenarios to consider:
A) You wreck your own car.
B) Someone with insurance crashes into you.
C) Someone without insurance crashes into you, or they've left the scene and you have no information.
Collision coverage generally always covers A, and probably sometimes C as well, though I'd guess that could vary by insurer and policy. You're paying $420 a year on a car with low value to cover scenarios that are probably very unlikely to happen. If you put that $420 into the bank, you'll have paid yourself the value of the car in 3 years.
I like Pop_Rivit's philosophy on this, though my personal threshold is closer to $5,000 than to $10,000. In either case, the concept is the same. Insurance is simply risk management in exchange for money. If you can manage that risk yourself, and cover the loss if something happens, then you're really better off to not buy the coverage and to self-insure.
Make the numbers smaller and it's easier to understand. You value the Sentra at $1,200. Fine. Say you to go Best Buy and buy a $120 printer. Would you spend $42 on a replacement policy on that $120 printer? Probably not. Would you spend $42 EACH YEAR on that $120 printer? Most certainly not. That's what you're doing with the Sentra -- you're spending $420 a year to replace a $1,200 asset, and it only covers at most 2 of the 3 crash scenarios highlighted above.
Our Acura MDX is worth probably about $6-7k. We have collision coverage on it, though it is getting to the point that I would begin to consider when to drop it. It's our family vehicle, and one we plan to keep for many more years, but, financially, there becomes a point where you're putting good money after bad.
