The Best Approach For Buying New Car Insurance: An Expert Guide To Cut Expenses

TLTR: This article discusses new car insurance. The costs, tips to save money, car brands that are cheaper to insure, and state laws. Some frequently asked questions are also answered.

There’s nothing like a new car, is there? The pristine way it looks and the worry-free way it runs even that unmistakable new-car smell—all of it adds up to unadulterated joy on wheels. Unfortunately, the insurance may run you more than if you’d bought a used vehicle. But never fear, we’re here to clue you in on some ways to keep your insurance costs down.

Buying New Car Insurance Is More Expensive

According to Statista, about 1.9 million cars were purchased between Januray to August of 2022. Despite the high number of car sales in the U.S., new car insurance can be relatively expensive compared to policies for older cars. One reason is that new cars, especially more expensive models, are more desirable, and therefore are more likely to be targeted by thieves or vandals who may strip them for parts. Some car insurance policies also cover the depreciated value with an additional endorsement such as gap insurance.

New cars have a lower resale value and thus need full coverage to protect against theft and other losses. Additionally, they are more expensive to repair as well. For example, if you buy the latest model of a Jeep Cherokee, then it will be more expensive to repair it when in comparison to an older model.

New cars are often more expensive to repair, as well.

That said, it’s important to note that not all new cars are expensive to insure. Many cars have different premium costs. According to Nerd Wallet, the five least expensive new cars to insure in 2023 are:

• Subaru Outback
• Jeep Wrangler
• Honda CR-V
• Subaru Forester
• Hyundai Tucson

Conversely, a list from Forbes shows that the most expensive cars to insure in 2023 are:

• Lexus NX 300h
• Dodge Ram 1500
• Lexus RX 350
• Nissan Altima 2.0
• Tesla Model 3 Standard Plus

Insurance Grace Period For When You Buy A New Car

New cars don’t necessarily mean new car insurance. You can usually just add your new car to an existing policy. And you usually get a short grace period with most insurers. For example, Progressive gives drivers 30 days after adding their new vehicle before they’re required to update their coverage, while other companies give less than week-long grace periods.

Make sure that your policy is updated before the end of your grace period, however long that may be. A lapse in coverage can cost you more money later on.

Another option is to purchase a short-term insurance policy, also called a “seven-day” or “30-day” policy. These are intended to give you the time you might need in order to buy new car insurance and save money. The downside is that these types of coverage often end up being more expensive than traditional rates.

Car Insurance For New Cars-State Wise

You probably know that car insurance is mandatory almost everywhere in the U.S. in some form or another. Here is a breakdown of policies required by each state.

States that only require bodily injury liability and property damage liability:

• Alabama
• Alaska
• Arizona
• Arkansas
• Colorado
• Delaware
• Florida
• Georgia
• Idaho
• Indiana
• Iowa
• Louisiana
• Maryland
• Mississippi
• Montana
• Nevada
• New Mexico
• Ohio
• Oklahoma
• Pennsylvania
• Rhode Island
• Tennessee
• Texas
• Utah
• Virginia
• Washington
• Wyoming

Note: Virginia allows drivers to opt out of purchasing auto insurance by paying a fee.

States that require bodily injury liability, property damage liability, and uninsured or underinsured motorist protection:

• Connecticut
• Illinois
• Maine
• Missouri
• Nebraska
• New Jersey
• North Carolina
• South Carolina
• South Dakota
• Vermont
• Washington, D.C.
• West Virginia
• Wisconsin

States that require bodily injury liability, property damage liability, and personal injury protection:

• Hawaii
• Kentucky
• Michigan

States that require all the above policies:

• Kansas
• Massachusetts
• Minnesota
• North Dakota
• Oregon
• New Hampshire
• New York

Note: New Hampshire allows its residents to opt out of auto insurance, but they must take financial responsibility for anyone they injure while driving.

All the information you need about meeting the minimum requirements of your state can be found on the state’s insurance commissioner’s website.

Cost of Car Insurance for New Cars in 2023

According to Bankrate, the national average cost of full coverage car insurance in 2023 is $1,771. This cost is likely to increase by 5% to 7% if you get insurance for a new car.

Keep in mind that there are many cars these days that have built-in technology for avoiding collision and anti-theft systems. If your new car has these features or other smart features, then your premium cost can be considerably lower.

Note: Some car insurance companies may charge you extra for having the above-mentioned features as they are more expensive to replace. Be sure to check with your insurance agent.

Factors That Determine the Cost of Premium for New Car Insurance

There are many factors considered by your insurance provider when calculating the cost of premiums for your new car insurance. Some of these factors are:

• Model Year of The Car
• Make of The Car
• Amount of Coverage Included
• Driver’s History
• Your Demographic Details
• State You Are In
• Claim History

Note: You may want to ask your insurance agent or insurance company the breakdown and the basis on which they calculate your new car insurance premiums.

Coverages You Should Include In Your Insurance for A New Car

A new car should have all-round coverage. There are many endorsements you should consider having in your policy. Some of the most important ones are:

• Hazard Insurance
• Property Damage Liability
• Collision Coverage
• Personal Injury Protection
• Uninsured Motorist Insurance
• Gap Insurance
• Bodily Injury Liability
• Comprehensive Coverage

Tips On Saving Money On Your New Car Insurance Policy

• Shop around for the cheapest possible quote
• Consider bundling your home and auto policies together
• If you are eligible, get a good student discount
• Ask about discounts for multiple vehicles or safety features such as anti-theft devices
• Consider removing endorsements that you don’t need in your policy
• Ask about multi-car discount deals
• Be a safe driver, invest in a defensive driving course
• Increase the amount you pay for deductibles
• Consider buying a cheaper car

Conclusion

If this is your first time purchasing a car and you don’t have insurance yet, then you must buy cheap full coverage insurance before you buy your car. New car insurance for new drivers is quite important. You must also buy your coverage beforehand if you are planning to change your insurer from your current company to us.

The rates of insurance are different for various cars. If you want to save money, it would be best to research the cost of your car and compare with other models before making a purchase decision. As affordable and customizable as policies are, no one can provide you with back-dated insurance. However, if an unfortunate event does come your way, we can help you with your car insurance claim process in a fast and efficient manner.

Get in touch with our experts. Find an agent today.