Getting Insurance When Buying a New Car

Tips, tricks and hints to help you hunt for auto insurance for your new car.

What's the best car insurance for a new vehicle?

Whether you’re getting your dream car or your A to B car, you gotta get insurance coverage. This will not only help you avoid any unnecessary legal fines but keep if your vehicle protected from covered loss. And while we understand car insurance is probably the most boring aspect of owning a car, we’ve outlined some tips and ways to save on car insurance for your new vehicle. Let’s get started.

Car insurance for a new vehicle
  1. Getting car insurance for your first vehicle
  2. Getting car insurance for an additional vehicle
  3. Ways to save
  4. Additional resources

Auto insurance for your first car: what you should know

If you buy your car from a dealership, they’ll most likely require you show proof of insurance prior to driving the vehicle off the lot. This is especially true if you lease or finance the vehicle. Understanding what you’ll need to get insurance quickly is imperative if you don’t want to spend your entire day at the dealership (who does?). Let’s outline some simple tips to get you in the driver's seat as soon as possible.

What you'll need to get a quote

In order to get the more accurate car insurance quote, you’ll need the following:

  • Date of birth of all drivers using the vehicle
  • Driver’s license numbers of all drivers using the vehicle
  • Garaging address of vehicle (most likely your home address)
  • Insurance history of drivers using the vehicle
  • Driving history of drivers using the vehicle
  • Vehicle Identification Number (VIN) — this tells the insurer the vehicle’s vital information, including make and model

Helpful hint!

Once you find the vehicle you want, you can get a quote prior to actually purchasing the vehicle by using the VIN. Many dealerships list the VIN on their website, allowing you to get an accurate estimate of your car insurance quote. Most insurance companies will then give you a quote number to retrieve the saved quote.

Once you activate the policy, your new insurance company will send the dealership your proof of insurance and you’ll be able to drive off the lot. Simple as that!

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Getting car insurance for an additional vehicle

While the process of getting your first vehicle versus your second is largely the same, having an established policy does give you some leeway in terms of when you can add your second car. Depending on your policy, you could have anywhere between 14-30 days to list your additional vehicle. If this is a feature of your insurance policy, the coverage you carry on your other vehicles would extend to the new vehicle for a predetermined amount of time.

The only caveat here is if the dealership requires you add the coverage immediately. If this is the case, you should follow the steps listed above for getting a quote.

Ways to save on insurance for your new car

After the sum cost of the vehicle, your car insurance is the second most expensive part of owning a vehicle. Let’s explore ways to save on car insurance./p>

Use your insurance coverage sparingly

If you don’t know much about car insurance, you might be more inclined to use it if you damage your vehicle, rather than just covering the cost yourself. Unfortunately, car insurance companies may financially penalize you if you file a claim, no matter if it’s your collision or liability coverage.*

  • Get an estimate for the repairs at a local mechanic.
  • Use our State of Insurance analysis to see by how much an at-fault accident (what this would be considered as) would raise your premium in your state. Consider this increase each year for 3 years, as that’s how long most insurance companies would charge you. Include your collision deductible in this, if it applies.
  • Choose the cheapest long-term option.

Bear in mind, this does not take into consideration not-at-fault accidents such as comprehensive and uninsured motorist claims. Comprehensive claims, because they happen outside the control of the driver, are often rated on your car insurance premium as a not-at-fault accident. If, however, your insurance company rates your not-at-fault accidents as at-fault accidents, consider it as a good opportunity to explore other insurance options.

As stated above, you'll want to look at your specific state to see the average rate increase for an at-fault accident. Still, we calculated a US-average rate increase over 3 years after an at-fault accident claim. Data show filing a claim will cost nearly $2,000, plus your deductible, once all is said and done.

Average Increase after at At-Fault Claim

Increase at 6 monthsIncrease at 12 monthsIncrease at 3 Years

*This solution only applies to instances pertaining to your vehicle. If the other party in an at-fault wants to go through your insurance company, which is common, you don't have a choice.

Choose the right insurance coverage

If your vehicle really is “new,” you do not have a lot of wiggle room in terms of what coverage you can have. Most of the time, if you have a lease or loan on the vehicle, having “full coverage” is a requirement of your agreement. By full coverage, we’re referring to comprehensive and collision, which aren’t required by law and only protect your vehicle.

So, if your vehicle is paid off and an older model, you might not need this additional coverage. A general rule of thumb in the world of insurance is if your vehicle is worth less than $4,000, you probably don’t need physical coverage. You can determine the value of your vehicle by using Kelley Blue Book or NADA guide online.

If, however, your vehicle is worth more than $4,000 but you still want to save, consider increasing your deductible. If you raise your deductible on your collision or comprehensive coverage, you lower your premium.

Average Annual Premium by Coverage Level

Coverage LevelAverage Annual Premium
Liability Only$672
$500 Deductible$1,427
$1,000 Deductible$1,268

Another benefit of this is it decreases your incentive to use your deductible rather than pay out of pocket. As we learned from the section above, using your collision coverage can have long-lasting effects on your insurance. By decreasing the dollar value of what you would receive in compensation, there is less of an incentive to file a claim.

Double check for discounts

While most of these discounts are small (3-5% in savings), grouped together they can add up to make your premium more affordable.

  • Multi-policy discount
  • Good driver discount
  • Paperless discount
  • Payment by bank account
  • Paid in full discount (paying your premium in one payment)
  • Multi-vehicle discount

Shop around

After it’s all said and done, you might just be paying too much because your current car insurance company is too expensive. Your best bet is looking at as many car insurance companies as possible to see if you could get a better rate elsewhere. Use our comparison calculate here to see if you’re getting the cheap car insurance rate possible. Get started now.

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Additional Resources and ways to save

If you’re looking for more ways to save on car insurance, or just information in general, see our additional articles here:

Recent Questions:

Car Insurance for a New Vehicle

How long do I have in Illinois to add a new vehicle to my current plan?

Apr 27, 2019
Peoria, IL

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