Driving home in your new set of wheels is one of the best feelings out there, but let’s not forget one little detail: car insurance. To be legally road-worthy, every car must be covered by an insurance policy. That means you need to get your new ride on a policy before you can roll off the lot.
What's in this guide?
- How much is insurance for a new car?
- How to get car insurance for a new car
- Get car insurance quotes for your new car
- Can I drive a new car without insurance?
- How do I get the best car insurance rates on a new car?
- Does buying a new car affect my car insurance rates?
- Can I add my new car to my current car insurance policy?
- Bottom line
How much is insurance for a new car?
With so many variables, how much you’ll pay to insure your new wheels varies by your new cars value, safety features and more. Expect to pay more if you’re upgrading to a car that’s worth more or you’re signing up for a car loan or lease.
- Car value. If you get a newer car, it generally cost more to insure because its value is typically higher and costs more to repair after an accident.
- Car repair costs. It’s often cheaper to repair an older car because it’s not worth as much, which is why newer cars can be more expensive to insure.
- Type of car. Swapping for a bigger or sportier car will often raise your rates. But if you’re trading in your sporty Miata or MG for a Chrysler LeBaron or similar sedan, you might actually see cheaper rates.
- Safety ratings. If you’re switching from an older vehicle lacking safety features to something with stellar safety ratings, you might actually see cheaper rates.
- Car loan or lease. Getting a loan or lease typically means your lender will require you to have collision and comprehensive coverage in addition to the state-required liability coverage. And more coverage means higher premiums.
How to get car insurance for a new car
To get your new wheels covered and get on your way, you’ll likely want to make some preparations before you hit the dealership.
Figure out what kind of coverage you need
If you’re taking out an auto loan through a bank or dealership, the bank may require specific coverages for the life of the loan, and there are others you may want to add.
- Collision coverage. This will protect you from getting stuck with the payment of a wrecked car. It might be required by your lender if you have a car loan.
- Comprehensive coverage. Having this coverage helps you repair or replace your vehicle if it’s damaged by something other than a collision. It might be required by your lender if you have a car loan.
- Gap insurance. This insurance covers the difference between what you owe on your car loan and your car’s worth. Since new cars depreciate as they leave the lot, gap insurance covers you for the gap caused by instant depreciation.
- Liability coverage. This covers the costs of an at-fault accident. You may want to increase your current liability to cover the new car costs.
You can’t sign up for a policy unless you have the exact details of the car you’re purchasing — not just its make and model. But you can compare quotes for the make and model you’ve got your eye on, and a few others if you want to get a good spread. Vehicles of the same body type can have wildly different car insurance rates, even if nothing about the driver changes.
The year of the car and its safety features will have a huge impact on your rates. This is because safer cars mean less medical payouts, and slightly older models are almost always less expensive to repair and replace than brand new.
Get a good read on what the insurance will likely cost you, and which insurance carrier has the best mix of coverage and price.
Call your current insurer
Before you head to the dealership, you probably want to call, email or live chat with a rep from your current car insurance company. Once you have someone on the line, find out if your new car will temporarily be covered under your existing policy.
If it is, you can hold off on purchasing new coverage or adding it to your existing policy until you get home with your new ride. If not, you’ll want to get ready to buy a policy from the lot.
You signed for your car, you know your coverage needs and you have quotes — now it’s time to buy. Many car insurance companies let you buy online or over the phone. Have the make, model and VIN on hand when you go to sign up.
If you need to buy your insurance before you drive off the lot, don’t fret. You can usually get your policy confirmed within an hour and get rolling.
Get car insurance quotes for your new car
Can I drive a new car without insurance?
No, but if you already have car insurance, your new one is typically covered for the first few days under what’s called a grace period. Your old insurance coverage limits may not be enough to fully protect your new vehicle in the event of a loss, so you’ll want to make the change over to your new policy as soon as possible.
How long is my new car covered on my old insurance?
The grace period is short, typically under 30 days. Carefully read your policy so that you know whether yours covers a grace period for new vehicles and how long it’s good for.
To avoid ending up without coverage when your grace period is up, add the new car to your existing policy or get a new one as soon as possible.
How do I get the best car insurance rates on a new car?
If you’re shopping around for a good deal, you can save on insurance rates for your new car.
- Hunt for discounts. You might find you get a discount for getting a quote online, paying your premiums in full up front or picking a new car with extra safety features.
- Choose a higher deductible. You can save money on your monthly rates by opting for the highest deductible you can afford.
- Only pay for the coverage you need. Don’t pay for extra coverage you won’t use. For example, new cars come standard with roadside assistance as part of the warranty, so you can skip this coverage on your car insurance policy.
- Consider usage-based insurance. Some providers can track your driving, and the safer you drive the better your rate.
- Complete a defensive driving course. You may score savings if you take an approved defensive driving course.
- Choose a car with extra safety features. Picking a new car with extra safety features or an anti-theft device to your car may lower your insurance rate. Check that the cost of adding this device is worth the amount you’ll save.
- Choose a cheaper car. Maybe you’re looking for a brand new car, or perhaps you’ll settle for a new-ish car. Consider a safer or cheaper car for lower insurance rates. A car that’s just a few years old could save you big in the long run.
- Shop around. Consider switching insurance instead of renewing, especially if you’ve undergone any big life changes like marriage or a new baby. Use comparison quotes and ask for a price match from your current insurer.
Does buying a new car affect my car insurance rates?
Several variables can affect the cost of your insurance. One of the biggest factors is the type of car you choose. It can vary the cost of insurance by hundreds of dollars per year — even for the same driver.
Here are the most common reasons people buy new vehicles and how that could impact your rates.
- Starting a family. If you’re welcoming a third member into your family or your young children are starting to grow, you’ll likely want a bigger and safer vehicle. If you’re buying a crossover SUV with good safety ratings, you could see some savings. But if you’re looking for more room and style by trading in your old car for a luxury one, your rates might increase.
- Teen drivers. New teen drivers will increase your insurance no matter what type of vehicle they’re driving. But you can minimize the increase by having them drive a car with top safety ratings that isn’t brand new.
- Relocating. If you’re moving to a big city, you might be downsizing your vehicle. Buying a compact car could result in significant savings, especially if you’re getting rid of a pickup truck. Keep in mind that location can also affect your rates, especially if it’s an area with a high claims rate.
- Mid-life upgrade. Mid-life success often brings new vehicles, which could include luxury or electric vehicles. Both tend to be pricier to insure, so you’ll want to account for the extra expense.
- Retirement. Retirees could be relocating, upgrading or downsizing — any of which can come with rate increases or decreases. But a safe driving record can help offset any hikes in rates.
Can I add my new car to my current car insurance policy?
If you already have a car insurance policy, most insurance companies give you seven to 30 days to update your policy coverage with details of your new car. If not, you’ll need to have a policy in place before you can drive off the lot with your new car.
- Determine your new coverage needs.
- Update your current policy within a week.
- Review your new rate from your current insurer.
- Take your new rate and compare it with other insurers to find the best deal.
Once you’ve settled on the ride of your dreams, you’ll have the info you need to shop around for an insurance provider. Compare premiums and benefits to find the most comprehensive coverage you’re looking for at an affordable rate.
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