Your Complete Guide To Getting Insurance For A New Car
We will answer all your questions about insuring a new car before it’s in your driveway.
Figuring out how to get insurance for a new car can feel like a catch-22. You need proof of insurance to drive off the lot, but you also need to know the type of car you’re getting to apply for insurance.
The short answer is this: Car insurance companies are ready to handle this issue. After all, drivers face this problem every time a car changes hands. State laws and company regulations vary, but there are general rules about adding a new car to your existing policy or buying a new car for the first time.
Keep reading if you’re on the verge of a new, exciting purchase and want to make sure you have the right insurance before you head to the dealer. We’ll also discuss some of the best companies for same-day car insurance and top providers to keep on your list. In a recent study, our team dove into over 30 of today’s top car insurance companies to help you make the right choice.
The smartest way to get a good deal on auto insurance is to collect and compare several quotes. Use our tool below to start comparing car insurance quotes:
How To Get Insurance For A New Car
Your best answer depends on your current car insurance situation. You may be:
Buying a car for the first time – or the first time in a while – and therefore have no insurance company
Replacing your old car as you get ready to sell it
Adding a new car to your collection and keeping your old one
We’ll go through each scenario and answer how to get insurance for a new car no matter your circumstances.
Buying Car Insurance For The First Time
Take a moment to review your state requirements. In nearly all states, liability insurance is compulsory. This means that you must have car insurance before you get behind the wheel. Because of this, most dealers won’t let you purchase the car without proof of insurance. The law also applies if you’re buying a car from a private seller. Do not let your car insurance lapse, and always be ready with proof of insurance before you start driving.
If you’re starting from scratch, you have a few options:
Same-Day Car Insurance
Let’s say you’re standing on the lot, in love with a new car and ready to sign. Many of the major auto insurance companies allow you to request a quote and buy car insurance on the same day. You do, however, need a good deal of personal information to fill out the quote request, so be sure to bring this with you if you want to buy it that day.
The insurance company will either ask for a down payment or a portion of your premium payment to confirm the start of your plan. It will then email you temporary proof of insurance before sending a more permanent card in the mail for your glove compartment.
This method is not best for comparing rates or shopping around to find the best car insurance plan for you. It can, however, act as a placeholder if you want to switch providers in the near future. Many companies do not charge a cancellation fee and will provide prorated refunds based on how many days you stay on the plan.
You also run the risk of getting turned down for same-day coverage if the company needs more information. So, to play it safe, consider acting ahead of time.
Shop Around Once Your Have Your Car Details
Most consumers shop around before choosing a car. If you’ve found the wheels of your dreams and plan to make the final purchase over the weekend, spend the week beforehand comparing quotes. You’ll need your new car’s vehicle identification number (VIN), final price, and details about the make and model.
Some smaller insurance agencies require a phone or in-person conversation to supply a quote, so factor this into your timeframe.
Buying A New Car As A Teen Driver
On the hunt for the best car insurance for teens and new drivers? Though rates vary, many teens can get the best rates by joining their parents’ plan. Parents may already have discounts from multi-plans or multiple vehicles.
Premiums for young drivers can be quite high, with rates as high as $3,500 a year, according to CBS News. We recommend speaking to your car insurance company before buying the car and shopping around for other rates for an individual plan to compare.
When you take the time to shop around, you’re more likely to find companies that offer student and teen discounts, as well as those that cut prices for defensive driving courses.
Insurance For A New Car When Selling Your Old One
This scenario depends on whether you immediately canceled the insurance for your old car or if you have an overlap. If your old policy is still intact, you may be able to buy the new car without doing a thing on the same day. Many auto insurance companies offer a grace period when you add a new car to your policy. This typically ranges from a few days to 30 days, so be sure to check your policy before you head to the dealer.
We recommend checking in with your car insurance company even if it offers a grace period. Some dealers will not let you drive away without some sort of proof that you’ve done so.
Discuss this with the dealer as you shop around to avoid complications.
Insurance For A New Car When Keeping Your Old One
Adding a new car to the family? The setup is very similar to the situation above. Your company may have a grace period, but before, you have to tell a representative that you bought the new car. This is not always sufficient for the dealer and can be confusing for police officers if you get pulled over soon after your new purchase.
When you add a new car to your policy, your rate may change based on the type of car, its age, and how many miles it has, if it’s a used car.
What Is An Insurance Grace Period?
This term can be a little deceiving. Even when you live in one of the two states without compulsory car insurance – Virginia and New Hampshire – you need to buy insurance or follow car insurance waiving requirements before you start driving. The insurance grace period typically refers to a number of days or weeks before you need to tell your existing insurance company about a new vehicle or change in information.
Be sure to check your policy and speak with a representative since grace periods can last anywhere from seven to thirty days.
Grace periods are very helpful if you buy your car over the weekend. As we mentioned above, as long as your dealer gives you the green light, you can typically call your insurance company first thing on Monday morning to alert them of the change.
How Much Is New Car Insurance?
If you’re new to the car insurance game, don’t panic. There are many car insurance providers offering competitive rates and discount opportunities. That being said, the average monthly cost of car insurance as of early 2020 is $122.50 a month.
Averages can be deceiving however. So many factors go into determining everyone’s premium, meaning rates can range from around $50 to $200 a month.
Here’s a quick list of what affects car insurance rates:
Your state’s requirements
How much insurance you purchase
Your personal profile (age, gender, marital status)
Your driving record
Vehicle data (make, model, year, mileage, safety features)
Your community or professional affiliations
How To Get Car Insurance Quotes
Car insurance providers give free quotes to potential customers, so you have nothing to lose other than time by shopping around. Once you narrow down your choices, you typically need the list of information above to determine your quote. The company may also ask for additional information to check if you qualify for discounts or something that would raise the risk of covering your driving.
Get a quote from a company either:
Smaller companies may combine the two methods, inviting you to enter information online, so they can follow up with a phone call.
New Car Insurance Requirements
Now let’s recap how to get insurance for a new car. If you’re on the verge of buying a new car, we recommend doing the following:
Gather information on your new vehicle, even if you haven’t signed the final papers. Be sure to gather info on the make, model, and year, as well as your state laws.
Shop around for auto insurance quotes for your new vehicle if you’re starting from scratch or are looking for a better quote.
If you’re adding the car to your current plan – even before you’ve sold your own car – call your insurance company before you drive off the lot or as soon as it opens on Monday morning.
You must meet state limits for car insurance or fall within the grace period for your current company. We recommend checking in with your insurance agent before you make the final purchase, just to be safe.
Our Auto Insurance Recommendations
Not sure where to get started on how to get insurance for a new car? Take a look at our recent 2020 reviews of the top car insurance providers in the industry. We considered customer feedback, industry reputation, coverage options, and availability to come up with our favorites.
Progressive: 4.5 Stars
As one of the top choices in the nation, Progressive auto insurance is a great pick for same-day insurance if you’re in a pinch. It was even the first company you could buy insurance from online back in 1997. You can use its online system to:
Request an immediate quote
Compare quotes with similar companies
Immediately purchase a plan
Receive digital proof of insurance
Progressive has unique tools to help you find the best rate for your budget, which is especially helpful when you’re paying for insurance on an expensive new vehicle. Save money when you bundle with other insurance plans, multiple vehicles, or have months of safe driving.
State Farm: 4.5 Stars
State Farm auto insurance received above-average scores for its quotes and shopping experience, making this another solid choice for new car insurance in a hurry. You can even add a new car to your insurance plan online if you’re already a customer.
In addition to a quick quotes process, State Farm shines for its discounts and industry stability.
USAA: 5.0 Stars
If you have a little more time before you get that new car, USAA car insurance is one of the best choices across the board. You do need to qualify for the program through a military or family affiliation, but it is worth checking out if you do. You can get a quote without inputting your personal contact details, which is an incredibly rare perk if you don’t want to get on every insurance company’s mailing list.
USAA was the only company in our study to earn a 5.0 rating. Its customer service, discounted rates, thorough coverage, and industry reputation means it soared above the rest.