How Much Is New Car Insurance?

Friday, May 5, 2017

new car insuranceBuying a new car can be an exciting experience, or it can be very stressful. To make sure it is a positive experience you can spend some time looking at the different options that are available to you. Making sure you get the best possible cheap car insurance for your new car is simply a matter of understanding the process ahead of time so you can pick the best options for your personal situation. For insurance purposes, a “new” car is defined as one that has no previous owner, meaning you will be the original owner of the car. Some insurance companies will also specify that the car be no more than 2 or 3 years old. There are three important things to consider when buying a new car; the type of car, whether you are buying or leasing, and cost considerations regarding how much coverage you want.

Type of New Car

new car insurance 2There are a few important things to know about before you head into the dealership. The type of car you choose will have an effect on the cost of your insurance. Believe it or not, color is not one of them, but these are:

  • Driving habits. Families and parents of young children often choose reliable minivans and smaller SUVs, indicating safe driving habits and more savings. Sports car owners, on the other hand, are usually in it for the speed and performance, making it pretty obvious that safe driving habits are not the priority for them. These drivers will definitely have higher premiums, and should carry higher amounts of comprehensive and collision in addition to liability.
  • Newer models cost more to insure. Buying last year’s model can help you save on car insurance. On the other hand, you may get a better arrangement from the dealership on the newest model because they may offer more incentives to get people to buy those cars.
  • Safety records. The National Highway Traffic Safety Administration offers invaluable info on the safety of each model of new car, and the National Insurance Crime Bureau releases yearly reports on the most-stolen cars. Some cars have higher risks just because of the kind of car they are, and how easily they can be re-sold or dismantled for parts. These cars will most likely have higher insurance costs, so it is good to know ahead of time so you can make an informed choice.
  • Added safety features. Things like antilock brakes and LoJack® security systems provide and extra measure of safety that can help you lock in significant discounts with your insurance company. Make sure you tell your agent if you have any of these systems on your new car, insuring you get the best cheap car insurance available.
  • Consider the hybrid. While hybrids feature parts and systems that can be expensive to repair or replace, their drivers tend to be more safety-conscious. This makes them a lower risk, leading to lower rates.

Buying or Leasing A New Car

new car insurance 3Whether you are leasing or buying your new car, you will have to provide proof of liability coverage before you can drive away from the dealership. If you already have insurance, you probably have a clause in your policy granting a 30-day window to report a new purchase. If you are leasing, you will most likely have to have more than just the minimum required liability insurance. Adding comprehensive and collision will help to ensure your lender is sufficiently covered. You can easily arrange for coverage in advance of your purchase by calling your agent and adding the car to your policy. Make sure to read the fine print on your lease so you are aware of any time sensitive conditions

New Car Cost Considerations

You may be able to purchase three key insurance coverages that will help protect your new car if it’s accidentally damaged beyond repair. These coverages are: new car replacement coverage, repair provision coverage and loan or lease gap protection coverage. To make it easier, some insurance companies will roll these coverages into one package, called new car expanded car insurance 4

  • New car replacement coverage. This coverage may help pay to replace a new car that’s totaled. With this coverage, your policy may allow you to replace the totaled vehicle with a new one of the same make, model and equipment, or it may specify whether a similar model or certain dollar amount would be available.
  • Repair provision coverage. Some policies may also cover the cost of repairs should there be only a partial loss to your new vehicle, regardless of its actual cash value. Repair provision coverage may help pay for repairs to a damaged vehicle on a replacement cost basis without deducting the depreciation in its value. Remember, however, that coverage limits still apply.
  • Loan or lease GAP coverage. According to the National Association of Insurance Commissioners, Guaranteed Asset Protection, or GAP coverage, may help pay the difference between the amount owed on an auto loan or lease and the totaled car’s actual cash value. Due to a combination of financing and depreciation, many drivers end up owing more on their car than it’s actually worth.  So if the reimbursement check from the insurance company is not enough to cover what you owe, GAP coverage will help pay for the
    remaining amount on a loan or lease, so you won’t be stuck paying for a car that is now in the scrap yard.

new car insurance 5In conclusion, when you buy a new car, it’s up to you to inform your insurance company of the purchase and modify your policy to match. The type of vehicle you want to cover will affect your rate, and researching new car insurance can also help you decide which car to buy. Comparing quotes from multiple providers will help you be able to find cheap car insurance coverage that meets your needs.


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