How can you get the best rates for your new car? You need to ask for quotes and understand the discounts available. Find out why you need new car insurance when you purchase or lease a new vehicle.
When Should You Get New Car Insurance?
As soon as you decide to buy a new vehicle, start thinking about how much you’ll need to spend to insure it. Many insurance providers offer a grace period so that you don’t have to switch providers right away. As long as you show the dealership proof of insurance, the dealer will usually let you drive off with your new car. However, you’ll need an insurance policy that covers your new car shortly afterward, so do it as soon as possible.
If you don’t yet have car insurance, you can begin your research before taking ownership of the vehicle. As long as you have the vehicle’s VIN, you can take out an insurance policy. The specific grace period varies from provider to provider. Ask your insurance provider whether it has a grace period and how long the grace period lasts. Some offer as little as 24 hours. Even a few hours of a lapse in coverage can lead to increased insurance rates.
How Much Coverage Do You Need for a New Car?
Auto insurance is required in every state, regardless of the vehicle you drive. Buying car insurance for a new car is similar to buying coverage for a used car. However, the largest difference is that you may opt for more coverage to protect your investment.
Before you show up to take your new car home, evaluate your coverage. While a small grace period exists in which your provider will cover your new car at the same coverage as your old one, you may need additional coverage, depending on your new vehicle’s value. New cars and leases often require full coverage, including liability and physical damage protection.
Many new cars will require the following types of coverage:
- State’s mandatory insurance minimum: This amount refers to the minimum level of insurance you’re required to carry, according to your state. This insurance minimum most often includes liability insurance and uninsured motorist and personal injury protection.
- Lender-required insurance: If you bought your new car using a loan, your lender likely has a minimum amount of insurance required. This minimum might include collision and comprehensive coverage and increased liability coverage.
According to Allstate, the insurance required by the lender protects your investment. A new car can be an expensive purchase. Make sure you have enough vehicle insurance to cover any damages. You may be able to add additional types of insurance to cover your investment further, including the following:
- New car replacement: New car replacement insurance replaces your new car with one of the same value.
- Gap coverage: Gap coverage will cover the difference between the value of your vehicle and your loan if your vehicle is totaled in an accident.
Consider your insurance needs and whether it makes sense financially to add these additional coverages to your policy.
How Much Can I Expect to Pay for New Car Coverage?
Insuring a new car will usually be more expensive because new vehicles are costlier to replace or make repairs. However, the exact cost will vary, depending on the following factors:
- Vehicle’s year.
- Manufacturer and model.
- Damage history and title.
- Level of coverage purchased.
You may also be subject to additional factors that can affect your rate, especially if you are buying a new policy. These factors include your driving record, the number of miles you drive each day, your age and gender, and the deductible you choose.
Some newer vehicles will qualify for discounts if they are equipped with safety features such as automatic emergency braking or anti-theft devices. You can learn more about a new vehicle’s safety rating by checking the Insurance Institute for Highway Safety (IIHS). Always ask if you are eligible for any discounts that can make your insurance premium cheaper.
What Are Some Tips for Buying New Car Insurance?
While you may need to insure a new car, you don’t have to go over budget to get the insurance you need. Get the best new car insurance rates with the following tips:
- Shop around: Getting insurance quotes from multiple providers allows you to compare prices. According to ValuePenguin, you should collect quotes from at least three providers before choosing. When requesting quotes, however, make sure each one includes the same level of coverage and deductibles so that you can get an accurate estimate of what each policy includes.
- Consider your driving needs: Your insurance rates can be affected by factors such as using your vehicle for personal use or work. The number of miles you drive per year can also affect rates.
- Ensure you have everything you need ahead of time: Gathering all the information you need ahead of time can help you get quotes faster. You will need your VIN and personal information.
- Research discounts: Taking advantage of discounts is a good way to decrease your insurance rates. Be sure to ask each provider if you are eligible for any discounts, including multipolicy or for having certain safety features equipped.
Since the type and model of vehicle you buy can affect your insurance rates, it can help to get a few quotes before buying the vehicles. These quotes can help you determine whether insurance is affordable. You don’t have to buy the policy to find out how much it will cost.
Once you decide to buy a new car and the policy, insurance companies will usually send you the proof of insurance the same day, via email, or on your smartphone. While you don’t need insurance when test driving vehicles, you will need proof of insurance before driving off the lot with your new car. If you already have car insurance, you can easily add your new vehicle to your policy. However, you should still request quotes from multiple sources to ensure that you are getting the best rate and have enough coverage.
Comparing insurance prices is one of the first steps you should take when buying a new vehicle. Make sure you have enough coverage to protect your investment.
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