Buying a new car can be an expensive proposition. You have to consider not just the purchase price of the car but also what you will pay monthly for insurance and maintenance. But before you get your heart set on one specific vehicle, it is vital to find out if your current insurance provider covers it at all. Read on to find out some questions that you should ask yourself to figure out if your current policy will cover a new vehicle or not so that you don’t end up paying more than necessary.
How Does Your Current Insurance Cover a New Vehicle?
Insurance companies have their own rules and regulations about what cars they allow to be covered by a standard policy. For the most part, insurance policies cover used or new cars in the model year 2000 or newer. You can find out if your current provider covers a specific vehicle by calling them up and asking for a “rate quote” on it. This will come in the form of a monthly rate and an estimated annual premium.
If you already own a car when you purchase a new one, your insurance company will automatically provide the same coverage amount on your new car. The policy you currently have on your old car will cover the new car for a period of four days. This is called the grace period. After this ends, if you have not made arrangements for new insurance coverage, your new car will no longer be covered.
If you do not have an active car insurance policy when you purchase your new car, you will need to set up insurance before buying and taking possession of the car. If you buy a new car from a private seller rather than a dealership, you are still required to have insurance coverage. Your insurance company’s four-day grace period will still apply. If you have another car already on the current policy, the amount of the coverage on the new car will be equal to the car with the highest insured amount listed on the policy.
When you go to switch the insurance coverage from the old car to the new one, you will need certain information to set up the new policy:
- Vehicle make and model
- Vehicle model year
- Vehicle Identification Number (VIN)
- Contact information on the lender
What Is the Minimum Insurance Coverage Required for a New Vehicle?
In many states, car insurance laws require you to have a specific minimum amount of coverage before you can drive away in your new automobile. If your current policy does not meet these standards, then switching insurers might be the only option that you have available.
New vehicles must be covered by minimum liability protection. This means that you have to have at least three types of coverage: bodily injury liability, property damage liability, and uninsured/underinsured motorist bodily injury.
How Can You Save Money on Monthly Premiums?
You may want to consider raising the deductibles on your policy before you purchase a new car. Many companies offer discounts if you are willing to set higher deductibles, but make sure that you have enough funds in savings to cover the cost of repairs should you get into an accident.
Another option is to purchase a “low mileage” discount for your new vehicle. If you drive very little each year, then it will be less expensive to insure as companies often offer lower rates the fewer miles you drive per year. However, this low mileage rate does not apply automatically, and you must ask about it when you make your initial inquiry.
Finally, if you plan on purchasing collision and comprehensive insurance for your car, be sure to get a “multi-car” discount from your company. Many companies offer reduced rates for customers who insure more than one vehicle with them. This type of discount can save you money if you have two or more cars.
Does Your Current Insurance Cover Leasing a Car?
If you decide to lease a car rather than buy a new one, there are additional insurance requirements that you will have to meet. The majority of leasing companies will expect you to add physical damage coverage to your insurance policy. Regardless, you will have to go with collision coverage and comprehensive coverage to give you full insurance protection before leasing a new car.
How Much Does It Cost To Insure a New Vehicle?
The price you pay for your monthly premiums depends on several factors, including how old you are, your credit score, and the kind of car you drive. According to a recent survey, the most popularly purchased new vehicle is an SUV, but this type of car usually costs more to insure than a sedan. If you’re looking for cheap car insurance, then you may want to consider purchasing a less expensive used vehicle as it will be less expensive to insure than a newer model.
Each company has its own formula for determining the cost of your monthly premiums, but as a general rule, it will take some time to find low rates on a new car. You may have to research online or call several different companies before you can find affordable prices that meet your needs. If you really want to save money on your monthly premiums, you may want to consider dropping comprehensive, and collision coverage as this is the type of insurance that costs the most.
What Are Some Insurance Issues to Consider Before Buying a Car?
If you are thinking about purchasing a new or used car, it’s essential to consider all of your options before making your final decision. There may be certain costs associated with owning and driving a newer model car that you don’t think about. For example, if you want to drive an expensive car such as a sports utility vehicle (SUV) or a luxury sedan, you will have to pay more for car insurance monthly.
What Are Some Tips for Saving Money on Car Insurance?
Car insurance rates vary from person to person, depending on the car you drive and how many miles you drive each year. For example, a sports car may cost you more to insure if it is driven daily because sports cars are usually higher-priced models. If you drive less than 5,000 miles per year and keep your vehicle garaged at home for most of the time, you can expect to pay more for insurance coverage since this is a very low mileage rate.
Insurance companies have a special formula for determining the cost of your monthly premiums, but to save money on your car insurance, you will have to be a safe driver with a clean driving record. You may also want to shop around online or call several different companies before deciding which one offers you the best price for car insurance.
Why Should You Inquire About Your Current Auto Policy Coverage When Purchasing a New Car or Truck?
If you purchase a new car, then it is important that you contact your insurance provider and tell them. This way, your company will send your new vehicle information to the National Insurance Crime Bureau so that they can update their records accordingly.
If you’re planning to purchase a brand-new car, you should ask your insurance provider about coverage before changing vehicles. Make sure that your existing policy will stay in effect until the vehicle has been replaced.
