For many, purchasing a new car is a big deal. Maybe you’ve spent hours test driving and researching to find the right car, or maybe you’ve just always had your heart set on a particular make and model.
Once you’ve found the vehicle that meets your needs, you’ll have to insure it. But when should you insure a new car?
Should you insure a car before buying it?
The timing of purchasing insurance on a new car is important, and if you are financing your vehicle, the dealership will walk you through the process.
The lienholder—typically a bank or credit union—will require you to carry insurance on your new car. That’s because the lienholder is the actual owner of the vehicle until you pay it off and receive the title. Because they own the vehicle, you need to insure this expensive purchase to reduce the financial risk if the car is in an accident before it is paid off.
This means that you will want to have your insurance coverage for your new car ready to go before you drive the car off of the sales lot.
Even if you are paying cash in full for a new or used car, you will need insurance before you take possession of the vehicle. That’s because almost every state requires you to have proof of insurance as a condition of driving on public roads.
Research before you buy
Once you’ve narrowed down your ideal new car choices, talk to your insurance company to find out how much you’ll be paying to insure those makes and models.
A lot of different factors contribute to your insurance premiums. Some of these factors will be the same no matter which vehicle you choose, like your driving record, where you live, your age, and in some states even your credit rating might be considered.
Other factors will be influenced by the vehicle, so if you are concerned about high premiums, it might be worth comparing several makes and models if you have any flexibility on your vehicle decision.
For instance, some cars are more likely than others to be stolen. Some have higher repair costs. These are examples of vehicle-dependent factors that may affect your premiums, so getting quotes before you sign on the dotted line could help you to make a final decision.
If you have already reached a decision on which car you are going to purchase, you may wish to consider getting quotes from several insurance companies. Insurers have proprietary algorithms to calculate premiums, which can result in savings for you. Having estimates on how much your new car could cost to insure is important information to have before you buy.
Grace periods
If you already have insurance on a car and you are buying a new one, some insurance companies will extend a grace period for getting the information over to them on your new vehicle. This is a courtesy provided by some insurance companies for customers in good standing, and you should not assume it is automatic—or that it’s offered by every company. State laws can also affect whether a grace period is available.
Some grace periods can be as short as 24 hours, or as long as 30 days. Rather than relying on the existence of a grace period for car insurance, it is better to be proactive and confirm coverage for your new car before you get behind the wheel as an owner for the first time.
Proof of insurance
You will need to provide proof of insurance before you take possession of your new car. If you already have a vehicle insured, that should be sufficient—but, it’s better to contact your insurance company and provide them with the make, model, year, and vehicle identification number (VIN).
Insuring a new vehicle at the time of purchase is now very common, as there are lots of car insurance options for new cars. It’s an easy process that can usually be taken care of through a phone call, and in some cases it could be as simple as providing the new car’s information through your insurer’s app on your smartphone.
Where can I get insurance for my new car?
If you want to learn more about what car insurance options there are for your new vehicle, you can always contact the experts at Rate. Working with nearly twenty top-rated auto insurance carriers, they will be able to find you the coverage you need at a great price.
Disclaimer:
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate Insurance. Rate Insurance, its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
