You do not need full coverage on a used car unless it is financed through a finance company.
However, full coverage is good to have in case of an accident. If you are at fault, you may be resposible for medical bills as well as car repair for everyone involved in the accident. Full coverage insurance will pay for that.
Maybe and maybe not. A lot of it depends on the cost of coverage vs. the value of the vehicle. For vehicles with little value, the smarter decision is to keep savings on hand to replace the vehicle and skip the collision coverage. Even if you don't have a lot of savings, the question becomes how much will collision pay to replace the vehicle. If this is a decent amount of money and you don't have the savings to cover a replacement vehicle, then it may be wise to keep collision.
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