6

I own my car outright and just moved to a large city. Public transportation and access to a roommate's car makes transportation easy. I am thinking about storing my car at my parents house and cancelling my car insurance. The car will not be driven unless I reactivate my insurance.

Are there any pitfalls involved in this I should be aware of?
Will there be any reactivation fees or higher insurance fees in the future?

  • 1
    What country are you in? In California you can't keep the registration without insurance, you'll have to return the plates. – littleadv Aug 30 '11 at 21:50
  • based on the asker's profile, I tagged it for United States. – Colin Pickard Aug 31 '11 at 12:12
  • According to the Wikipedia article on US auto insurance New Hampshire is the only state without some form of auto insurance requirement. Granted, this says nothing about the specifics regarding registration, and such, if the car will not be driven. – George Marian Aug 31 '11 at 20:17
  • Illinois to be precise! Thanks for the advice everyone – Kevin Lamb Aug 31 '11 at 20:35
13

If you go a period of time without car insurance, when you want to get it again you are treated as a higher risk insuree. I had that happen too me when I went back to school. I got rid of the car while in school and after finally graduating, getting a job and a new car my insurance rates were quite high despite having a safe driving record. They said it was because I wasn't insured for a few years. I don't recall how long it took for me to get reclassified as a safe driver.

15

My insurer will let me suspend my insurance and park the car. It costs about $1/month, but I am still covered if it gets stolen from where it sits.

I guess I can call and change it from suspended to not suspended once a month in their system, but I really only do it a couple of times a year for a second car.

Call your carrier and see if they have such a solution, perhaps it will be the best of both worlds for you.

  • 6
    Insurance companies around here refer to this as "parking insurance". In my jurisdiction at least, you need insurance even if you aren't driving the car so it isn't optional if you own a car. However, it's actually worth getting even if you don't have a car for a while, because it means you get to keep your "insurance history" current. – ChrisInEdmonton Aug 30 '11 at 20:40
10

If you're expecting to not use that car for a long time (several months or more), and it does not have enormous sentimental value, you should think about just selling it. Cars depreciate something like 1% per month, and can degrade if they're not driven reasonably regularly, so I think the break-even is at about 6 months disuse.

  • 2
    Not to mention critters love parked cars. While this may not sound bad its amazing how much damage a family of mice can do to a car in just a few weeks. – user4127 Aug 31 '11 at 17:52
  • 1
    I am really considering this as well. Fortunately it will be in a clean garage but of course that will not stop depreciation – Kevin Lamb Aug 31 '11 at 20:37
  • @Kevin - Critters exist everywhere. Granted a clean garage with no food source is less likely to attract critters that does not mean they can not get there though. – user4127 Sep 7 '11 at 18:10
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    .. and not only the financial depreciation and the mice, but also the battery tends to fail, fluids degrade, things can start to corrode, the gas starts to separate and gum things up... – poolie Sep 8 '11 at 2:01
5

If you are driving a roommate's car, you still need liability coverage. If you injure someone, you are personally liable regardless of the car's ownership.

Talk to your insurance agent, they can help walk you through the options in your state. You need to be meticulous about following the rules -- the DMV looks unkindly upon insurance lapses.

  • 1
    This varies by state. In IL the car is insured rather than the driver. You can not get a blanket policy in IL that will allow you to drive any car and be covered by your policy. – user4127 Aug 31 '11 at 17:49
  • True, but I believe in most states if you carry insurance, medical coverage from your policy can apply to you if you have an accident in another car. You are right though -- this probably varies widely by state. – duffbeer703 Sep 1 '11 at 16:01
  • That is not true in IL. Your medical coverage (personal not auto) can cover your medical expenses. But the Medical portion of accident coverage is by vehicle. – user4127 Sep 1 '11 at 16:37
2

Depending on your state (NY is one), if you cancel your insurance, you must also turn-in your plates.

  • 1
    Yeah. DMV wasn't too happy with me when I didn't renew my plates on an inoperative car that I was in the process of replacing. I ended up without a penalty when I signed an affidavit that the car was inoperative. Merely not driven would not have been enough. – Loren Pechtel Dec 26 '15 at 23:45
2

Depending upon the insurance company they might want to charge you a bit extra for not having had coverage in a given amount of time.

But beyond that, when it comes time to get insurance again there should not be any extra fees. However, if you are canceling the insurance in the middle of the period there might be some sort of fee.

  • 4
    "bit extra" is probably overly optimistic. "A huge amount extra" is probably more accurate. – ChrisInEdmonton Aug 30 '11 at 20:38

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