Under what circumstances when purchasing collision policy is not a wise decision? It's all about the replacement cost; can you get the same car for the money from insurance company.
For newer vehicles, it is obvious that (1) the car worth a lot more, therefore collision policy make sense; (2) the replacement cost is well established and standardized because wear and tear limited and maintenance history is short.
For older vehicles, the value is greatly depended on the condition. If you know the car in good shape, the insurance company will never compensated adequately for find a similar car with same condition. The ratio of premium/deductible/salvage value to the vehicle cash value will narrow as cars age, therefore everyone is tempted the question "when to drop the collision coverage".
Premium = 420; deductible = 500; salvage value (est/) = 2,000? =
Premium liability collision/other than collision for cash value (500/200) = 213
Cash value of a vehicle = $5,000; - costs of policy = 920, net cash value for replacement vehicle = $4,100
Cash value/salvage = 2,000,
The ratio is about 4,100/2000 = 2.0
