Purchasing a new Car can be a pleasurable experience. Driving a new automobile off the dealer’s lot is a lovely feeling, with its immaculate exterior and interior, single-digit odometer, and that new car scent.
However, purchasing new car insurance might be a difficult undertaking. You want to make sure you get the correct coverage without paying too much. This is how you do it.
Is Car Insurance Required for a New Car?
Except New Hampshire and Virginia, mandates car insurance. Your state’s minimum insurance requirements will vary. If you have a car loan or lease, your lender or leasing company may need additional coverage in addition to state standards.
The forms of coverage that you may be required to obtain are listed below
Car liability insurance
When you cause an automobile accident, liability insurance covers property damage and bodily injuries. It also covers legal fees, as well as court judgments and settlements. Your state’s minimum liability vehicle insurance mandate is almost certainly in place. In California, for example, you must buy at least 15/30/5 liability coverage if you want car insurance.
This is what those figures mean
For one person per accident, 15 = $15,000 in bodily injury/death coverage.
Many people have bodily injury or death coverage of $30,000 per accident (30 / 30).
$5,000 in property damage coverage per accident.
It’s a good idea to obtain more liability insurance than your state requires. because such figures are severely insufficient. For example, if you cause a severe accident that results in numerous people being seriously injured, $30,000 won’t get you very far, leaving you with significant out-of-pocket expenses.
A good rule of thumb is to buy enough liability auto insurance to cover what you could lose in a lawsuit.
Comprehensive and collision coverage
If you have a car loan or lease, collision and comprehensive insurance will almost certainly be required by your lender or leasing company. That way, if your automobile is damaged or stolen, you won’t be able to avoid paying your bills.
Collision insurance covers repairs to your automobile if you are involved in a car accident, regardless of who is at fault. For example, if you back up into a pole, collision insurance will cover the cost of the repairs (minus your deductible).
Comprehensive insurance covers damage from things that fall, floods, animal attacks, car theft, vandalism, fire, and hail.
Coverage for uninsured drivers
Uninsured motorist coverage and underinsured motorist coverage cover your medical expenses if you are hit by a driver who does not have liability car insurance (or does not have enough liability car insurance).
Uninsured motorist coverage is required in some states but optional in others. In general, this is adequate coverage. According to the Insurance Research Council, one out of every eight drivers in the United States does not have auto insurance.
Personal injury insurance
Personal injury protection (PIP) coverage pays medical bills and other expenses (such as lost wages and burial expenses) for you and your passengers regardless of who is at fault in the car accident.
PIP is required in 12 states under “no-fault insurance” laws. Three states mandate it, while four states and the District of Columbia make it optional.
What Kind of New Car Insurance Should I Think About?
You may wish to explore some additional coverage options when purchasing auto insurance for a new vehicle.
Gap insurance covers the difference between what your automobile is worth and what you owe on the loan if it is totaled due to a problem covered by your policy (such as a flood or a car accident). For example, if you owe $25,000 on your loan but your totaled automobile is only worth $22,000, this coverage will cover the $3,000 “gap.”
Replacement car insurance
New car replacement insurance pays for a brand new car of the same make or model if your new car is totaled due to an issue covered by your policy. This is a fantastic alternative for autos that lose value quickly.
Insurance for rental reimbursement
If your automobile is being repaired for a problem covered by your policy, rental reimbursement insurance pays for a rental car or alternative transportation (such as subway or bus tickets) (like a car accident).
Insurance for roadside assistance
If your car breaks down, roadside assistance insurance covers things like towing, locksmithing, jump-starting a dead battery, and fuel delivery.
What information do I require to purchase new auto insurance?
You’ll need the following information when purchasing car insurance for a new vehicle:
The new car’s vehicle identification number (VIN).
All of the policyholders’ driver’s license numbers
Date of birth for all insured drivers
Garage address (usually your home address)
How Can I Get Ready to Purchase New Car Insurance?
Before you drive your new automobile off the lot, you must have car insurance. Here’s how to get ready:
Compare vehicle insurance rates from a variety of providers.
Determine the types of insurance you require.
Choose the level of protection you require.
Optional coverage types to consider (such as gap coverage, new car reimbursement, or roadside assistance).
How Much Does New Car Insurance Cost?
Your new auto insurance rates are determined by various factors, including:
Your new car’s make and model
Your driving history
Where do you reside?
Your past claim history
The level of protection you select will
The amount of your deductible on your vehicle’s insurance
Insurance based on your credit score
When purchasing new car insurance, how can I save money?
Here are some suggestions for saving money on auto insurance for a new vehicle.
Car insurance quotes are compared.
Comparing vehicle insurance quotes from various insurers is the easiest way to obtain a decent bargain on new car insurance. Do not skip this important step. This is because auto insurance premiums vary greatly between companies.
Free auto insurance quotes are available here.
Online. Get quotes from an insurer’s website or from a website that compares many providers’ quotes.
On the phone or in-person Talk to a representative from an insurance company or an independent insurance agent who can get quotes from many companies.
Purchase the appropriate quantity of new car insurance.
Before you go to the dealership, figure out how much auto insurance you’ll need. For instance, you should determine how much liability auto insurance you need to cover your net worth, which includes your home and savings account. An insurance agent can help you figure out the limits of your policy and what kinds of extra coverage are available.
Inquire about discounts.
You may also be able to get discounts on your auto insurance for things like being a good driver, a good student, having more than one policy, or paying for it all at once. Many insurance companies offer these discounts.
Maintain your credit score.
If you have a car loan, you’re probably aware that your credit played a significant influence in the approval process. However, your credit score might have a significant impact on your vehicle insurance costs.
According to a Forbes Advisor review of auto insurance rates for bad credit drivers, bad credit drivers spend 76 percent more per year on car insurance than good credit drivers.
However, not all companies treat credit equally when determining vehicle insurance premiums, which is why it’s critical to shop around.
In California, Hawaii, Massachusetts, and Michigan, car insurance prices can’t be based on your credit score.
Is it possible to purchase new car insurance at the dealership?
You may be able to get new car insurance at the dealership, but your selections may be restricted, and it isn’t always the best method to get a fair rate. The dealership, for example, may only engage with one or two insurance firms.
Shopping around for affordable auto insurance before going to the dealership is the best way to go. You’ll be able to examine your coverage needs and compare rates from different insurers if you shop around ahead of time. In the long term, this will save you both time and money.
You can add the new vehicle to your existing auto insurance policy if you already have one. For example, Progressive auto insurance gives you a 30-day grace period after you acquire a new car to add it to your coverage. If your lender or leasing company requires collision and comprehensive coverage, you must add them to your current insurance.
We found the cheapest and most expensive new cars to insure by looking at rates from Quadrant Information Services, a company that provides insurance data and analytics.
Rates are based on a 30-year-old female driver with a clean driving record, $100,000 in bodily injury liability per person, $300,000 per accident, $100,000 in property damage liability, uninsured motorist coverage, and any additional state-mandated coverage. With a $500 deductible, the price also includes collision and comprehensive coverage.