New Car Insurance
Wondering how to insure the new car you just bought? If you have a current active auto insurance policy most insurance companies allow the coverage to transfer for a certain time period, but not all. So, if you have full coverage on your current policy and you buy a new car needing full coverage, ideally the coverage that you have on your current policy would transfer. But if you only have liability only and buy a new car needing full coverage only the liability coverage on your current policy would transfer and there would be no coverage for comprehensive and collision. Most of your nonstandard auto insurance companies will not allow the automatic coverage to transfer. Its more your preferred national auto insurance companies that allow the coverage to transfer.
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How does my auto insurance policy work when buying a new car?
Since most insurers offer a grace period of coverage when buying a new car, you can use your current verification card to be able to at least leave the lot with the car. We do recommend contacting your current auto insurance carrier before you purchase the vehicle to let them know you will be purchasing it, to be sure the coverage will transfer, and confirm the cost of your new monthly rate once vehicle is bought. There is nothing worse than buying a new car and finding out after the fact you can't afford the auto insurance.
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If for some reason your auto insurance company is closed and they do not offer automatic coverage for your new car there are several auto insurance companies that allow you to purchase insurance 24/7 via their website or call center. Here are some auto insurance companies that allow you to purchase auto insurance 24/7:
- Save Money Car Insurance
- Safe Auto
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Who are the best auto insurance companies for my new vehicle?
Many auto insurance companies charge more for a brand-new vehicle compared to an older one because it costs more to repair than an older car would. But on the other hand, you could argue that people drive safer because they will take better care of their brand-new car. Here are some of the top auto insurance companies we found for brand new cars:
- State Farm
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Progressive by far had the best rates we found for brand new vehicles. In many cases its cheaper to purchase auto insurance from them compared to older cars.
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How much does insurance cost for a new vehicle?
In most cases getting a new car will increase your monthly auto insurance rates compared to an older car. But the exact difference will vary based on many factors, here are a few of them:
- Your age
- Your driving record
- Insurance history
- Value of new vehicle
- Credit score
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These are just a few of the factors that will come into play when getting quotes for your new car. Even though new car insurance can be expensive there are always discounts you can ask for to get that rate down. Here are a few discounts to be aware of:
- Sign up for auto pay
- Sign up for paperless billing
- Pay your policy in full for 6 months at a time
- Keep a clear driving record
- Anti theft device in your car or Onstar
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One of the best ways to get cheap insurance on your new vehicle is to get as many quotes as possible and keep a clear driving record, these two things are key in finding good rates for your new car.
What are the auto insurance requirements for purchasing a new car?
Auto insurance is required in every state and there are no exceptions. If your vehicle is being financed, the auto insurance company does not have any specific requirements other than the basic state minimum liability limits. It is the lienholder that requires you to carry certain insurance limits specifically comprehensive and collision coverage which is related to the deductible you choose. Most finance companies will require you to carry a minimum of a $500 deductible. It is important to abide by their guidelines on the deductible they require you to carry. If you do not, they can slap forced place insurance coverage on your monthly payment that can be very expensive.
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You may want to also look at loan/lease payoff coverage, this is also known as gap insurance. This coverage will pay the difference between what you owe on the car and the actual value of it if it is totaled.
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Leased vehicles work a little differently since you don't technically own the car. Comprehensive and Collision coverage will be required and, in most cases, your deductible can't be above $1,000. In addition to this they typically require you to carry liability limits of 100/300/100 which can make your monthly price of auto insurance increase dramatically. In fact, many nonstandard auto insurance companies do not even offer liability limits that high. So, it's very important to contact your auto insurance company to get a quote before you commit to leasing a vehicle.
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If you are purchasing a new vehicle and you are not financing it then there will be no insurance requirements as far as comprehensive and collision coverage are concerned. You will just be required to carry the state minimum liability limits. This will save you a lot of money on your monthly premiums. Even though you may not be required to carry full coverage on a new car that is not financed it still may be a good idea to still carry the higher coverage because if you are hit by an uninsured motorist who destroys your new car you will be solely responsible for repairing it.
click to read more about choosing a deductible for your new car insurance policy
Which new cars are the cheapest to insurance?
Depending on what company you get a quote with will determine which new cars are the cheapest to insure. The cheaper cars to insure are normally those that are less costly to fix in the event of a claim. The number of losses a certain car may have, gives you a rough idea about how much it will cost to insure. The vin number will be the key factor in the exact quote on your new vehicle insurance, be sure to have this handy when you are getting quotes. Here are a few vehicles that notoriously have affordable new car insurance:
- Subaru Forester
- Honda CRV
- Ford Expedition
- GMC Yukon
- Toyota Sequoia
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Vehicles with lower accident history will result in cheaper auto insurance rates. But it is always best to call your insurance company before purchasing a new car to make sure the insurance is affordable. In a lot of cases the more expensive the vehicle the more the auto insurance will cost.
click here to watch more about how to file a claim on your auto insurance
click here to read more about turning in a claim on your car insurance
How long do I have to add my new vehicle to my auto insurance policy?
When you buy a new car most auto insurance companies will give you a grace period from between seven to thirty days of coverage. But like we said above most of the time it is only the larger more preferred companies that allow this. Most nonstandard auto insurance companies will not afford any coverage for a new car until the customers calls to add it to their policy.
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Tips for buying auto insurance for your new car
- Have your vin number handy so you can give it to your insurance company for an accurate price. If you do not have the vin handy you can give your insurance company the year, make, and model for the quote but it won't be the exact price just an estimate.
- Always call your insurance company and get a quote on your new car before you purchase it
Disclose what the vehicle will be used for. For example if you are using it for Uber or Lyft then you would need to disclose that to make sure you are covered properly.
- If anyone else is driving your car be sure to disclose it to your auto insurance company to make sure they are covered correctly in case the event of an accident.
- Plan ahead and look for all the possible discounts that you might qualify for in your new car.
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New vehicle insurance FAQ’S
Am I covered by dealer insurance?
Dealer insurance is not a true insurance policy, it's more of a collateral protection policy that covers the dealer if the vehicle is damaged. You would need to purchase a true auto insurance policy to be legally covered.
Can I get immediate proof of insurance sent to the dealership?
If you buy your new car during standard insurance company hours then most will be able to send you proof of insurance immediately. However, if you buy your new car outside of those hours and your specific insurance company isn't open after hours then you will have to wait to get proof of insurance when they open back up. Unless they have a customer portal login where you can go in and do the changes yourself, but this is rare.
Can I get new car replacement if I total my new car right away?
Auto insurance policies are designed to give you fair market value of your vehicle at the time of the loss. Some auto insurance carriers are starting to offer a “new car replacement” endorsement to their policy. But this is very rare, the few that do it are very large national carriers. And even so be sure to read the fine print on our policy because it can be a very ambiguous coverage. If you owe more than your vehicle is worth than that is a good time to purchase gap insurance. Most auto insurance companies do not offer Gap Insurance. The best place to purchase gap insurance we have found is through your finance company.
How do I get my lienholder information?
Your lienholder information can be provided by your car salesperson at the dealership. It is important to give your insurance company the correct lienholder information. Most dealerships will require them to be listed on your policy before you can leave the car lot with your vehicle.