New Car Insurance
A new car is usually one of the most expensive purchases a person will make, and it’s important to insure it properly to protect the investment. Buying insurance for a brand new car poses different challenges than buying it for a used car. Coverage may be more expensive and you will need to make the necessary adjustments to your policy to afford both a car payment and the new insurance bill.
When Do You Buy the Car Insurance?
You have 30 days from the date of purchase to insure the vehicle and get it registered. The sooner you insure the vehicle, however, the better as you will be protected from accidents, theft, vandalism and other problems during that first month. If you already have an insurance policy for your other vehicles, your coverage may extend to the new vehicle during that first 30 days if it’s involved in an accident, but it’s not guaranteed.
If you’ve never had insurance before, buying a new policy may take a day or two as the insurance company reviews your information and sets everything up. If you already have insurance, adding a new vehicle is very easy. You can simply call the insurer to request a new vehicle be added, and the dealer can fax over any information they might need to complete the process. You may even be able to complete this over the phone. That will enable your policy to be active from the moment you drive the car off the lot.
What Coverage Do You Need?
If the vehicle is being leased or financed, you will need to carry full coverage auto insurance including collision and comprehensive coverage. Even if you buy the new car in cash, it’s still a good idea to carry full coverage insurance on it. New cars can be expensive to repair or replace, and full coverage insurance will help cover those costs if the vehicle is ever damaged or stolen. If you carry only the state-required liability coverage, you’re on your own for replacing or repairing your car.
Financed vehicles may also be sold with optional gap insurance. It’s a good idea to purchase this whenever possible. Gap insurance pays for the “gap” between a vehicle’s actual value and what is owed on the loan in the event of a total loss accident. This is crucial because vehicles depreciate at a fast rate and it’s easy to owe more in car payments than the vehicle is worth; without gap insurance, you may be stuck paying a car payment on a vehicle you no longer own.
Gap insurance is usually purchased from the financing company or the dealership, but you may be able to buy it from your insurance company as well. Be sure to ask when you purchase the vehicle what your options are for obtaining this type of coverage.
How Much Will Car Insurance Cost?
Auto insurance for a new vehicle may be more expensive than coverage for a similar used car. This occurs because the new car will cost more money to replace if it’s ever destroyed in an accident. New cars are also more expensive to repair than old cars due to technological improvements and warranties, so the rates will be highest during the first few years that the vehicle is insured.
You will also pay more for full coverage than you will for liability-only policies, so if you’re replacing a very old car with a brand new one, your rates may increase dramatically due to the change in coverage. You can reduce the effect of this rate increase by raising your deductibles or lowering the policy limits.
Fortunately, although new cars can be expensive to insure, they also provide a good opportunity to save money on insurance. When shopping for a new car, you can keep an eye out for makes and models that are less expensive to insure; by keeping the cost of auto insurance in mind, you can save money on coverage throughout the life of the vehicle. Cars with high safety ratings are usually affordable, and you can add safety features and anti-theft devices to the car to reduce the cost of the policy even further.
If you know in advance what kind of car you plan to buy, you can submit for a quote online with the details for the prospective purchase. This allows you to comparison shop between multiple insurers to get an idea of what the policy will cost and who will give you the best deal. Doing this homework before you buy the car will help save you time and money when it comes to insuring your new purchase.