For the most part, getting new auto insurance is a lot like buying coverage for any other vehicle. However, there are some details, and you may have different needs when it comes to insuring a new car than you would if you were protecting a used one.
We at the Home Media Reviews team have taken an in-depth look at how to get car insurance for a new car, from the basic types of coverage to how much they might cost you. Our team has also shortlisted a few recommended service providers from our 2022 list Best car insurance Comp.
How does auto insurance work on a new car?
The short answer is that auto insurance on a new car works pretty much as it does with any car. What sets new car insurance apart is the fact that you can – and often should – buy it before you actually own the car. That’s because most dealers and agents require proof of insurance to transfer ownership of the vehicle to you.
When does a new car insurance policy start?
If you purchased insurance before taking ownership of a new car, the policy will start the moment you drive away from the location. Agents often require it because it is illegal for anyone to drive without car insurance.
You will need the following information on hand to start a new car insurance policy before purchasing the vehicle:
- Purchasing price
- Vehicle identification number (VIN)
- Your contact information
Most auto insurance providers will be able to start your policy within 24 hours. You can even find same-day insurance from several auto insurance companies.
Is there a grace period for new car insurance?
While it is true that you cannot legally drive without auto insurance, some companies do offer a grace period. This is the period of time during which you are allowed to drive your car without starting a new insurance policy. This grace period usually lasts from seven to 30 days from the date of purchase.
Determining whether or not you have a grace period depends on several factors, including:
- Insured’s conditionOne of the reasons you have a grace period is that you are renewing your previous insurance policy to a new one. In this case, your old coverage types and limits may apply until you start a new car insurance policy.
- Insurance company: Insurers have very different rules about grace periods. For example, Progressive allows a grace period of 30 days, while some providers have no grace period at all.
Because grace periods vary from company to company, it’s always a good idea to know exactly what your policy will allow. You can find this information in the fine print of your contract, but it may be easier to ask your insurance agent.
How much does new car insurance cost?
Technically, whether the car is new or used does not affect your insurance premiums. However, you will notice higher prices for a new car if it is generally more expensive than your previous car.
According to our research, the national average cost of full auto insurance coverage is $1,730 per year. However, your insurance premium will likely vary based on personal and vehicle-specific factors.
What factors affect new car insurance costs?
The value of your car is just one of many factors insurance companies use to determine premiums. When you insure any vehicle, new or used, these are the most influential factors:
- age: Younger drivers, especially teen drivers, usually pay higher premiums than drivers in other age groups. The length of time you have had your driver’s license can also be a factor, as experience usually leads to responsible driving behaviours.
- Driving history: A clean driving history allows you to reach the lowest rates. Any accidents, speeding violations or driving under the influence (DUI) can increase your insurance premiums significantly.
- Balance levelIn states where it is legal, insurance companies typically charge drivers with poor credit scores more for coverage than those with average or good grades.
- SiteCar insurance rates vary from state to state, but they also vary within states. Those in New York City or an urban area in California often pay much more for coverage than drivers in nearby rural areas.
- Marital Status: Some insurance companies charge married drivers a lower fee for coverage than unmarried drivers.
- Coverage types: The types of insurance you include in your policy make a big difference in what you will ultimately pay. Minimum coverage policies are usually the cheapest, with additional coverages increasing your cost.
- Coverage limitsThe limits you set for insurance coverage play a major role in your premiums. In general, your monthly premiums will be lower if you have lower coverage limits.
- deductibleYour deductible, which is the amount you’ll pay out of pocket for repairs or a full loss claim, can also affect your premium. In most cases, your premium will be lower if you have a large discount on your new car insurance policy.
- Discounts: Most insurance companies offer discounts on their coverage. One of the most common is the combination deduction for combining your auto insurance policy with other insurance products such as homeowners, renters, or life insurance.
What type of insurance do you need on a new car?
For the most part, you don’t need different types of insurance on a new car than you need for any other vehicle. The types and amounts of coverage you need depend on other factors, such as where you live and whether or not your lender has additional requirements if you take out a new car loan.
Minimum requirements for government coverage
Each state has its own minimum insurance requirements. These standards are usually created by the state Department of Motor Vehicles (DMV) or similar agency, and these standards often vary widely.
You can find your state’s requirements along with more information and our recommendations for cheap providers by clicking on your state on the map below:
Standard types of new car insurance
The minimum state requirement almost always consists of some variation of the auto insurance coverage options listed below.
- Bodily Injury Liability InsuranceCovers the loss of wages and medical bills to third parties in an accident found to be at fault.
- Property damage liability coverageCovers the cost of damage to vehicles and other property involved in an accident you caused.
- Personal injury protection (PIP)Covers medical expenses and lost wages for you and other members of your party, regardless of who caused the accident.
- Medical Payments (MedPay): Covers medical bills but does not cover lost wages for you and your party, regardless of who is found to be at fault in the collision.
- Uninsured/Uninsured Motorist CoverCovers your property and casualty claims if the driver at fault does not have enough coverage to pay for it.
Other potential insurance requirements
Some lenders require borrowers to carry new auto insurance add-ons that cover damage to the vehicle in all circumstances. This is intended to protect the financial interest of the lender. That’s why you may be required to implement additional coverage options like these if you take out a new car loan:
- collision coverage: Covers damage to your vehicle regardless of who is at fault in an accident.
- Comprehensive coverage: Covers damage to your vehicle from sources other than accidents such as fire, theft or vandalism.
- gap lock: This type of insurance covers the difference between what you owe the car and what it is owed in the event of a total loss.
- Pay off the loan or rentCovers the remaining balance in the car loan or rental in the event of a total loss.
Additional Coverage Options
While the standard options are often the same from one provider to another, many insurance companies differentiate themselves through additional options. Many of these add-ons help manage other aspects of new car ownership, such as breakdowns and emergencies.
Some of the more popular optional coverages you’ll find are:
- Roadside assistance: Covers the cost of emergency roadside services such as towing, fuel delivery, flat tire repair or replacement.
- rent payment: Covers the cost of the rental car while your vehicle is being repaired or replaced.
- Mechanical Failure Insurance (MBI): Covers repairs to some vehicle components after a failure similar to Car warranty extension.
- Rideshare Insurance: Covers you during downtime if you are driving for a participating company such as Lyft or Uber.
- Travel expensesCovers food, lodging and other travel costs if you are unable to use your vehicle after a covered loss away from home.
Most auto insurance companies offer unique sets of optional new car insurances. You can learn about all the options available as well as what each plan covers by speaking with an agent.
How to buy insurance for a new car
Buying a new car insurance policy is often the same as getting insurance for any other car. With most insurance companies, you should be able to find and purchase coverage and start your policy while you wait at the agency.
The process of obtaining coverage is relatively simple. Just follow these steps:
- Prepare the information needed to start getting quotes. This includes the vehicle’s VIN number, purchase price and your contact information.
- Start shopping for free quotes. You can quickly and easily compare car insurance quotes online with most providers. We recommend getting estimates from at least three providers before making a decision.
- Choose your insurance provider and plan. Choose the quote that offers you the best combination of cost and peace of mind. You should be able to start your automatic coverage policy almost immediately.
- Give the agency your new insurance card. Most companies now offer a mobile app that allows you to withdraw your insurance card whenever you need it. You’ll be able to send this to the agent to get your keys, usually through a PDF copy via email.
New Car Insurance: Conclusion
It is a good idea to get insurance on a new car before you buy it, and in many cases you will be required to do so. Fortunately, you have the ability to get auto insurance quotes almost instantly online or over the phone with policies that can start almost immediately.
New Car Insurance: Recommended Providers
It’s so easy to shop for car insurance that you can most likely do so while you’re waiting for the financing department or any other delay related to buying a car. Our team recommends State Farm and Travelers as good places to start your search.
State Farm: Editor’s Choice
State Farm is the largest insurer in the country with the highest score among all providers in our 2022 Insurance Study. Drivers can often find inexpensive new auto insurance through State Farm, and the company offers a wide range of coverage options. additional. With a plethora of insurance discounts to choose from, State Farm policyholders can get the coverage they want at an affordable price.
Read on: State farm insurance review
Travelers: Most Coverage Options
People looking to cover as many parts of their new car or motorcycle as possible may want to take a look at Travellers. In our study of insurance for 2022, we found that the company has a broad coverage portfolio, with many traveler options that are attractive to new vehicle owners. For example, replacing a Premier New CarⓇ It will cover the cost of a brand new replacement for the same make and model in the event of a complete loss.
Read on: Passenger insurance review
New car insurance: FAQ
Because consumers rely on us to provide objective and accurate information, we’ve created a comprehensive rating system to craft our ratings for the best auto insurance companies. We have collected data from dozens of auto insurance providers to rank companies according to a wide range of rating factors. The end result was an overall rating for each provider, with the insurance companies with the most points coming first on the list.
In this article, we have selected companies with high overall ratings and cost ratings. Cost classifications were determined by estimates of auto insurance rates generated by Quadrant Information Services and Discount Opportunities.
* Accuracy of data at time of publication.