Buying a new car can be an exciting experience. But it is also important to consider buying car insurance for your new vehicle so that you are covered as soon as you drive it out of the batch.
If you are buying your first car, the process of getting insurance coverage is a little different than if you are transferring a contract from your current car to a new one.
If you already have car insurance, I will you need to change the coverage from your current vehicle to the new one. In most cases, this should be a fairly simple process involving contacting your dealer or your insurance company either online or by phone. You will need the details of the vehicle you are buying, including year, make and model, along with the vehicle identification number (VIN). Depending on the type of vehicle you are buying, your premiums may increase or decrease compared to what you are currently paying.
If you finance the car, You will need additional coverage which may not be necessary if you are paying cash. Depending on your lender, you may need to bring vacuum insurance in case your new car is completed or severely damaged. It’s the difference between what you owe on your rent or loan and the book value of the vehicle. You may also be required to bring collision or comprehensive coverage to pay for vehicle repairs or replacement after a covered claim, such as a wing spin or hailstorm.
Buying a new car is a great time to shop for insurance coverage, even if you are happy with your current contract and costs. This is especially true if you have not done so in a long time. Experts recommend that you receive competitive bids once a year, just to make sure you get the best coverage you can for your budget.
What if you do not have car insurance?
If this is your first car or you do not already have a car insurance policy, you will need to shop for the best company and coverage for your needs and budget. Here’s what you need to do:
- Identify the types of car insurance you are required to have (eg liability, personal injury protection, comprehensive and collision, etc.).
- Have your personal information ready, including driver’s license and social security numbers, address, and so on.
- Include the type of vehicle you intend to purchase, including make, model, year and vehicle identification number (VIN), if any.
- Receive quotes from at least three insurance companies.
- Compare premiums, coverage amounts and limits.
- Make an informed choice and buy your new insurance policy.
It is important to start this process as soon as you start buying a car from the dealer because you will need coverage as soon as you buy the vehicle. You will also want to allow time for agents to contact you with quotes, select a company and contract, and determine your insurance costs as part of your overall budget for your new car.
If you have had car insurance in the past and still have a copy of the contract, this is a good place to start. An older contract will give you at least an idea of what you paid for in the past and the types of coverage you had. If nothing else, you will have contact information to get started.
The cost of car insurance varies greatly, depending on the make, year and model of the vehicle along with age, driving history, credit rating and other factors. Which insurance company you choose can also have a big impact on prices. Our studies have shown that some insurance companies have more affordable prices than others, in a wide range of demographic groups.
The cheapest car insurance companies in 2022
- USA: $ 1,000
- Geico: $ 1,148
- State farm: $ 1,267
- Throughout the territory: $ 1,327
- Travelers: $ 1,371
- American Family: $ 1,371
- Progressive: $ 1,533
- farmers: $ 1,917
- Allstate: $ 2,047
All states except New Hampshire and Virginia require some form of car insurance. Coverage requirements vary by state, but mandatory coverage for personal injury and property damage is the norm. Here are some of the types of coverage you will need when buying a new car, depending on the state in which you live:
- Liability insurance: This provides coverage to help you pay for injuries to people who are not in your vehicle or property damage caused by a collision when it is your fault. The minimum limits of liability insurance vary depending on the state, so you will need at least the minimum required coverage.
- Personal Injury Protection (PIP): Sometimes referred to as “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 spare parts and labor to repair your vehicle is covered by collision insurance. Although not required by law, your lender will likely require collision insurance to secure financing for a rented or purchased vehicle.
- Comprehensive insurance: Damage to the vehicle caused by hail, fire or anything other than a collision is covered by full insurance. Again, this is not required by law, but will probably be necessary for vehicle financing.
- Coverage of uninsured and underinsured motorists: Required in many states, this provides coverage to pay for injuries and property damage caused by another driver with insufficient coverage or none at all.
Almost all states require proof of at least minimum liability before any vehicle can be legally driven on public roads. If you are financing a purchase or lease, your lender will also require additional coverage, including total insurance or conflict insurance.
Even if you do not own or plan to buy a car, you may want to buy insurance. A non-owner car insurance policy is an option for people who frequently use a car sharing service, borrow a friend’s car, or travel frequently and rent a car when they do. Provides liability protection and, in some cases, personal injury protection (PIP), as well as medical payment coverage and protection for uninsured / uninsured motorists.
Proof of insurance is not necessarily required to purchase a car, but the dealership should see proof of insurance if you plan to test a vehicle. They should also confirm that you have coverage for your new purchase before withdrawing it from the sales batch.
With any major insurance company, you should be able to buy coverage on the same day you buy a vehicle. This can be done either through an insurance agent or through an insurance company website or customer service number. The whole process can often be completed in 30 minutes or less, especially if you are just updating an existing policy with a new vehicle.
Most insurance companies allow a short grace period if you lose a payment, but there is no car insurance grace period that allows you to drive a new car without insurance. Coverage is required as soon as you purchase the vehicle. Contact your current insurer to find out what is required when adding a new vehicle to your contract and how soon you need to do so.
Void insurance covers the difference between the amount you owe on the balance of a car loan or lease and the value of the vehicle in the event that your car is repaid. If you are financing or renting your vehicle, you may be required to have vacuum insurance.
For more information on car insurance, see the following guides:
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For more information on other types of insurance, see the following guides:
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