Buy auto insurance for your new car

Buy auto insurance

Buying a new car can be an exciting experience. But it's also important to think about buying car insurance for your new vehicle so it's covered as soon as you pull it off the lot.

How do you buy car insurance for a new car?

If you're buying your first car, the process of getting insurance coverage is a little different than if you're transferring a policy from your current car to a new one.

If you already have auto insurance, you'll need to switch coverage from your current vehicle to the new one. In most cases, this should be a fairly straightforward process that involves contacting your agent or contacting your insurance company, either online or by phone. You will need the details of the vehicle you are purchasing, including the year, make and model, along with the Vehicle Identification Number (VIN). Depending on the type of vehicle you purchase, your insurance premiums may go up or down compared to what you currently pay.

If you're financing the car, you'll need additional coverage that may not be necessary if you pay cash. Depending on your lender, you may be required to have gap insurance in case your new car is totally or severely damaged. It is the difference between what you owe on your lease or loan and what the book value of the vehicle is. You may also be required to have comprehensive or collision coverage to pay for vehicle repairs or replacement after a covered claim, such as a fender strike or hail storm.

Buying a new car is a good time to look for insurance coverage, even if you're happy with your current policy and costs. That's especially true if you haven't done it in a while. Experts recommend getting competitive quotes once a year, just to make sure you're getting the best possible coverage for your budget.

What If You Don’t Have Car Insurance?

If this is your first car or you don't yet have a car insurance policy, you'll need to shop around for the best company and coverage for your needs and budget. This is what you will have to do:

  • Determine what types of car insurance you should have (for example, liability, personal injury protection, comprehensive and collision, etc.).
  • Have your personal information ready, including your driver's license and Social Security numbers, address, etc.
  • Include the type of vehicle you plan to purchase, including the make, model, year, and Vehicle Identification Number (VIN), if you have one.
  • Get quotes from at least three insurance companies.
  • Compare policy premiums, coverage amounts, and limits.
  • Make an informed decision and purchase your new insurance policy.

It's important to start this process at the same time you start shopping for a car at the dealership because you'll need coverage as soon as you buy the vehicle. You'll also want to allow time for agents to contact you with quotes, choose a company and policy, and determine the cost of your insurance as part of your overall budget for your new car.

If you've had car insurance in the past and still have a copy of the policy, that's a good place to start. An older policy will at least give you an idea of ​​what you paid for in the past and what types of coverage you had. At the very least, you'll have contact information to get started.

How much does car insurance cost for a new car?

Car insurance costs vary widely, depending on the make, year, and model of the vehicle, along with its age, driving history, credit rating, and other factors. The insurance company you choose can also have a big impact on your rates. Our studies have shown that some insurance companies have more affordable rates than others, across a wide range of demographics.

The Cheapest Car Insurance Companies in 2022

Average Annual Rates:

  • USAA: $1,000
  • Geico: $1,148
  • State Farm: $1,267
  • Nationwide: $1,327
  • Travelers: $1,371
  • American Family: $1,371
  • Progressive: $1,533
  • Farmers: $1,917
  • Allstate: $2,047

What insurance do you need when buying a new car?

All states except New Hampshire and Virginia require some form of auto insurance. Coverage requirements vary by state, but mandatory bodily injury and property damage liability coverage is the norm. Here are some of the types of coverage you'll need when buying a new car, depending on the state you live in:

  • Liability insurance: This provides coverage to help pay for injuries to people not in your vehicle or property damage caused by a crash when you are at fault. Liability insurance minimums vary by state, so you'll need at least the minimum required coverage.
  • Personal injury protection (PIP): Sometimes called “no-fault” insurance, this coverage helps pay for medical expenses and lost wages if you or your passengers are injured in an accident. This coverage is required in states with no-fault insurance.
  • Collision insurance: The cost of parts and labor to repair your vehicle is covered by collision insurance. Although not required by law, collision insurance may be required by your lender to secure the financing of a leased or purchased vehicle.
  • Comprehensive insurance: Damage to the vehicle caused by hail, fire, or something other than a collision is covered by comprehensive insurance. Again, this is not required by law, but it will likely be necessary to obtain financing for the vehicle. 
  • Uninsured and underinsured motorist coverage: Required in many states, this provides coverage to pay for injuries and property damage caused by another underinsured or uninsured driver.

Almost all states require proof of at least minimal liability coverage before any vehicle can be legally driven on public roads. If you're financing a purchase or lease, your lender will also require additional coverage, including comprehensive or collision insurance.

Even if you don't own or plan to buy a car, you may want to purchase insurance. A non-owner auto insurance policy is an option for people who often use a ride-sharing service, borrow a friend's vehicle, or travel often and rent a car when they do. It provides liability protection and, in some cases, personal injury protection (PIP), as well as medical payment coverage and uninsured and underinsured motorist protection.

Do car dealers require proof of insurance?

Proof of insurance is not necessarily required to buy a car, but the dealer will need to see proof of insurance if you plan to test drive a vehicle. They will also need to confirm that you have coverage on your new purchase before you take it off the sales lot.

Can you get car insurance the same day you buy a car?

With any major insurance company, you should be able to purchase coverage the same day you purchase a vehicle. This can be done through an insurance agent or insurance company website or customer service number. The entire process can often be done in 30 minutes or less, especially if you're simply upgrading an existing policy with a new vehicle.

What is a car insurance grace period?

Most insurance companies allow a short grace period if you miss a payment, but no car insurance grace period allows you to drive a new car without insurance. Coverage is required as soon as you purchase the vehicle. Check with your current insurer to find out what's required when adding a new vehicle to your policy and how soon you need to add it.

Do I need to buy Gap insurance?

Gap insurance covers the difference between how much you owe on a car loan or lease balance and the actual value of the vehicle in the event your car is totaled. If you finance or lease your vehicle, you may need to purchase differential insurance.

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