How to buy cheap car insurance for a new car

There’s nothing like that feeling of driving a brand-new car off the lot. However, in all the excitement, do not forget to protect your vehicle with the right amount of auto insurance. Before you buy your next car, learn how to protect it with new car auto insurance.

How to get cheap auto insurance for a new car

Many car dealerships will not let you drive off the lot until you have proof of auto insurance for a new vehicle. Auto insurance is required by law in nearly every state, so make sure that your new car is insured before you go to the dealer to pick it up.

However, if you already have insurance for an existing vehicle, this step could be as simple as calling your agent.

Many policies automatically extend your current coverage to your new vehicle, at least for a few days. Some states, such as Texas, even require insurers to automatically extend the customer’s existing coverage to a new vehicle.

However, it’s important to note that there may still be limitations on the extent of the coverage.

New car insurance coverage requirements

Whether your car is brand new or just new to you, if you’ve financed it, your lender will require you to get a full coverage auto insurance policy. But what does that mean?

Full coverage is a combination of comprehensive and collision, property damage liability, bodily injury liability and any other coverages required by your state or lender.

Essentially, your lender will want to ensure that the vehicle is fully covered for any potential damage or destruction because they own the vehicle until you’ve paid them back in full.

If you are not financing your new car, you’re only technically required to have your state’s minimum requirements. However, we strongly recommend you get more than state minimum liability coverage.

Unless you can afford to replace or repair your car if it is destroyed or damaged, you need some comprehensive and collision coverage, too. And most people need more liability coverage than your state requires — Insure editors recommend liability limits of 100/300/100.

Average car insurance cost

If you have good credit and a good driving history, your car insurance rate will be, on average, $1,758 annually, or $146 per month, for a full coverage policy.

But of course, that will vary substantially depending on where you live, what you’re driving and other factors.

How much is insurance for a new car?

Auto insurance for a new vehicle can cost substantially more than insurance on an older vehicle. After all, the value of your new car could be significantly more than that of a used vehicle.

Many auto insurance providers base rates on factors like your state, vehicle make/model, annual mileage, age, driving record and credit score (except in states where this isn’t allowed).

So, you should expect to pay more in insurance for a vehicle with a higher value and you should also expect to pay more in insurance if you’ve financed the new car and your lender requires full coverage.

Compare car insurance rates

You don’t want to be in the middle of purchasing your new vehicle to discover you can’t afford its insurance. To find the best car insurance rates, get multiple car insurance quotes and compare auto insurance rates by car model.

In the table below, see the lowest rates for new car insurance coverage, both full coverage and state minimum.

How can I lower my car insurance rates?

There are several ways to save money and receive the best car insurance rates:

• Opt for a higher deductible, which can lower your overall rates, but this will mean more money out-of-pocket if you experience a claim.
• Enroll in a defensive or safe driving course to save money on your annual auto insurance premium.
• Look for discounts. Insurance companies offer various discounts you may qualify for to help reduce your auto insurance.
• Consider usage-based insurance. If you are a low-mileage driver, you may benefit from a pay-per-mile policy. Additionally, if you’re a safe driver with good driving habits, you may benefit from a program that monitors your driving and rewards you.

Will my old car insurance cover a new car?

If you’re already paying for a car insurance policy, you may wonder if you can just use it for your new car. The answer is yes. Many insurance companies offer a new car grace period. However, ask your insurance agent about a grace period before purchasing your new car — and contact them immediately once you’ve made your final decision.

How long do you have to add a new car to your insurance policy?

Many insurance companies offer up to a 30-day grace period for a new or new-to-you vehicle. This will give you a bit of time to finalize everything with the new car and new policy.

Your auto insurance provider should be able to provide instant proof of insurance so you can hit the road in your new wheels without delay.

What is gap insurance?

Gap insurance pays out the difference between what you still owe on the car and the amount your insurer will pay if the car is totaled (the actual cash value, or ACV) while relatively new.

For example, let’s say you bought a new car, financing it with a loan of $30,000. Two weeks later, the car is totaled in an accident and valued at just $25,000. Without gap insurance, your insurer only pays the car’s current value, leaving you with a $5,000 bill. However, if you have gap insurance coverage, also known as “auto loan/lease insurance,” that bill won’t come out of your pocket.