If you own a classic car, you’ll want to make sure you have the right insurance cover, at the right price, for your pride and joy.
You’ll need to know about the important differences between standard and classic car insurance, whether your car qualifies as a classic, and all about agreed value and limited mileage.
We’ve got all the answers in our guide to classic car insurance.
- When does a car become a classic for insurance?
- What is classic car insurance?
- How much does classic car insurance cost?
- How does classic car insurance differ from standard car insurance?
- What are the main features of classic car insurance?
- Can you insure a classic car as a daily driver?
- How can I reduce the cost of classic car insurance?
- What does classic car insurance for business purposes cover?
- What add-ons are available for a classic car insurance policy?
Pinpointing when a car becomes a classic can be tricky, with different insurers having various criteria depending on the types of cars they’ll insure.
According to HMRC, a classic car is a vehicle of at least 15 years old and valued at £15,000 or more, but the government also provides an exemption from Vehicle Excise Duty for cars more than 40 years old.
Some classics are easy to spot, like a 1960s Jaguar E-Type or MGB, but some insurers might class a much newer 2002 Ford Focus RS as a modern classic.
There is no hard and fast rule when it comes to defining a classic car, but if it’s collectible, rare, or valuable, provokes nostalgia, and is no longer in production, an insurer might consider it a classic car.
What are veteran, vintage, and post-vintage cars?
Some classic cars can be strictly categorised purely by their age of manufacture.
The categories are:
- Veteran: any car built before the first world war (1914);
- Vintage: cars built between the end of the war, 1919, and 1930;
- Post-vintage: cars manufactured between 1930 and the end of the second world war in 1945.
Insurance for classic cars is specially designed for older cars mainly used for leisure purposes, as second vehicles, and covering a low annual mileage.
For example, you may own a modern car for daily use that would be covered under a standard car insurance policy, and a classic car for weekend or occasional use insured under a classic car insurance policy.
Even though your vehicle may fit the ‘classic’ criteria it doesn’t necessarily mean that a classic car policy is suitable. If the car is your primary mode of transport that you use as an everyday vehicle then it should be insured on a standard car insurance policy.
Can I insure multiple classic cars?
Yes, insurers are happy to cover more than one vehicle on a classic car insurance policy, with some offering fleet-style policies for collectors who have a large number of vehicles.
Are classic cars hard to insure?
No, insuring a classic car is very easy.
On the whole, insurance companies view classic cars as fairly low risk as their owners tend to take more care of their cherished vehicles than people do of their everyday vehicles.
What is vintage car insurance?
Vintage car insurance and heritage car insurance are typically just different names for classic car insurance.
Classic car insurance is usually cheaper than standard car insurance, with premiums starting from as little as £66 a year*.
Owners are more likely to look after and maintain their classic cars, drive them more safely, store them in locked garages, and use them less frequently, and therefore there are far fewer claims involving classics than modern cars.
Like standard car insurance, the exact premium depends on the type of car, your age, driving history, and where you live, but classic car insurance is also rated on how often you use your car, and its value.
Classic car insurance and standard car insurance both cover you for damage to third parties, fire, theft and, if you have comprehensive cover, damage to your own vehicle.
But there are some important differences, mostly revolving around the terms and conditions of the policy, which can vary from one insurer to another.
Some insurers require your car to be at least 25 or 30 years old, while others will cover more modern classics under a classic car policy.
Similarly, some will only provide cover for drivers over a certain age, maybe 21 or 25, while others are happy to provide classic car insurance for young drivers.
Classic car policies usually limit the number of miles you can drive a year in return for a cheaper premium and require you to provide a valuation and photographs of your vehicle to secure an agreed value in the event of a claim. Standard car insurance policies usually base claims on the market value of the vehicle at the time.
Finally, no claims bonus doesn’t usually apply to classic car policies in the way it does for standard policies.
Classic car insurance has a number of features tailor-made for enthusiasts who want to protect the value of their investment, and use their car less frequently than their everyday vehicle.
Here, we’ll answer some of the main questions surrounding these features.
What does ‘agreed value’ mean?
Agreed value is where the insurer has agreed a valuation for your vehicle with you and set it within your policy schedule. If your car is stolen or written off, this is the value your insurer will pay out when you make a claim.
If you don’t have an agreed value written into your policy, any claim would be settled at the insurer’s opinion of the market value at the time of the claim – which could be less than you believe your car is worth.
It’s advisable to update your agreed value each year at renewal, either by getting an independent valuation or by looking at adverts online or in magazines for similar cars.
Because classic car insurance premiums are partly calculated on the value of the vehicle, it’s important your agreed value is not too low, or you run the risk of underinsurance clauses kicking in when you claim.
For example, if you insure a £20,000 vehicle for an agreed value of £10,000 – and therefore pay a premium based on that valuation – even a partial damage claim could be settled at only 50% of its cost.
What does limited mileage mean?
Classic car insurance is designed for vehicles used as second cars, so there is almost always a limit to how many miles policyholders can drive their car in a year.
Along with the value of the vehicle, how often you drive it is used as a rating factor for classic car insurance quotes, so the fewer miles you drive, the less you will pay.
It’s important that you stick to the mileage you agree to each year and tell your insurer if you exceed it. Additional mileage may incur an additional premium but failing to declare it could invalidate your cover.
Annual mileage limits can be from as little as 1,500 miles up to 7,500.
What is laid-up cover for classic cars?
Laid-up cover provides fire and theft insurance for classic car owners who want to take their vehicles off the road for a period of time, either to keep them off the road over winter, or for a longer period for restoration. This type of cover is also often referred to as build-up cover.
If you want to use a classic car as a daily driver, some insurers – but not all – will still insure you on an agreed value, classic car insurance policy.
The premium is likely to be higher, however, because of the higher mileage and greater risk from exposure to daily rush hour traffic than it would if you’re using the car purely for leisure.
There are a few ways you can reduce the cost of your classic car insurance:
- Calculate your annual mileage accurately – the fewer miles you drive, the cheaper your insurance, so it’s important not to overestimate your annual mileage and, as a result, pay too much;
- Join a car club – some insurers provide discounts to club members, viewing it as the sign of a true enthusiast who will look after their vehicle well;
- Keep your car secure – older cars tend to be easier to steal than new ones, so improving your car’s security can keep premiums down. Always park it in a locked garage at night, and consider fitting a tracking device and alarm;
- Pay annually – a one-off payment at renewal is likely to be cheaper than spreading the cost with an instalment plan, where interest charges are applied.
It’s often possible to extend the usage on your classic car insurance to include hiring out your car for weddings, proms, car shows, and even TV programmes where period vehicles are needed.
However, this type of cover is usually only considered for clients where any revenue is used to support the upkeep of the vehicle, rather than the car’s primary use and the policyholder’s main source of income.
It’s also possible to include your own business use so that you can drive to multiple places of work but, again, this should not be the main use of the vehicle.
Also bear in mind that your classic vehicle will not be exempt from vehicle tax if it’s used for hire and reward or commercial business, even if it is more than 40 years old.
Some classic car insurers will provide cover for track days and parades, and road time trials and navigation rallies, while more standard motor insurance add-ons include:
- Breakdown cover: national roadside and at-home cover, plus cover while in Europe;
- Motor legal expenses: covers the legal costs to defend or pursue action against another driver;
- Key cover: for loss of keys to your car, home, or office;
- Excess protect: cover to reduce your excess exposure.
The key to getting the best classic car insurance cover for your own individual circumstances is to speak to an expert broker. Get in touch with Alan Boswell Group on 01603 649650 for a competitive quote for your classic car.
*based on a 50 year-old insuring a Ford Escort at a value of £15,000 on a comprehensive basis. Parked on a driveway in an NR postcode with an annual limit of 3000 miles. £75 excess.