It’s easy to get swept up in the excitement of buying a new car, but remember that there will be expenses other than just the purchase price. One of those costs is insurance for a new car. Auto insurance is important to get because it can help cover damage to vehicles and property, as well as injuries to people involved in crashes. Almost all states have laws that will require you to insure your new car, but even where they may not, your lender probably will. So, read on and find out about some of the things that help answer the question, “Is insurance more expensive for new cars?”
These are four of the things that insurance companies consider when they set the cost of insurance for a new car:
If you’re still undecided about buying a new or used car, here is some information that may help you choose.
Learn moreOnce you’ve decided on the new car you want to buy, you might be unsure of whether you can drive it off the lot before getting insurance for it. Or maybe you already know that most insurance companies have a new car insurance grace period, provided you have an existing car insurance policy with them.
Your insurance agent can confirm whether they offer a grace period or not and will tell you how long you have to insure your new car, typically 7 to 30 days. If you’re happy with your current auto insurance carrier, you can usually switch insurance to a new car by logging into your policy online or through your insurer’s mobile app, or by calling your agent.
If you don’t have an auto insurance policy already in effect, in almost all cases you will have to get one before you can register your vehicle with the DMV. And of course, driving without insurance could have major consequences.
Before you purchase insurance for your new car, you’ll want to learn the different types of coverage available—each applies to a different situation. While the last few types in the following list are not mandatory, they’re still valuable in certain situations. Some, like new car replacement insurance, might be more suited to your situation than others.
The best way to learn what you’ll pay for insurance is to talk to your agent. Identify several vehicle models you’re considering so the agent can give you insurance quotes to compare and answer questions about the different types of coverage available. With the insurance information you need, you’ll be one step closer to driving your new car.
There’s no denying that car insurance prices have been rising. The Bureau of Labor and Statistics reported that in March 2024, car insurance costs rose 2.6%—triple the 0.9% increase that happened in February. That’s reason enough to explore ways to reduce your rate. Here are four things you can do:
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