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Insurance When Buying a New Car: What to Know

When buying insurance for a new car, there are a few things you should know beforehand.

insurance when buying a new car

Buying a new car is an exciting and undoubtedly unique process, especially in today’s world where that process is progressively changing. But whether you choose to buy your car online or from a traditional dealership, purchase a used vehicle or decide to lease, there’s one constant – you’re going to need good car insurance coverage.

Jodi DeSantis, managing director of insurance sales for AAA Northeast, and a few of her agents help answer important questions you may have about insurance when buying a new car. So when you find a great deal on a car you love, you can drive away with peace of mind.

Get a quote or speak to an agent about buying car insurance through AAA.

Is there a difference when buying insurance for a new car vs. a used car?

Lenders can request specific coverages that could increase the cost of insurance. For example, auto loan companies require a vehicle to carry collision and comprehensive coverage.

Learn about financing your car through AAA.

Depending on your budget, buying used gives you some flexibility in regard to coverage, enabling you to have a bit more control over your premium as opposed to buying new. This decision becomes especially important if you have a teen driver on your policy that may drive up insurance costs. Teens are statistically the riskiest drivers on the road.

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How about when leasing a car?

When leasing a vehicle, be sure to consider loan/lease, also known as guaranteed asset protection or GAP coverage, as this provides an additional cushion in the event the vehicle is totaled. This coverage would pay the difference between the actual cash value of your vehicle and the unpaid balance on your loan or lease in a covered total loss scenario.

Keep in mind that leased vehicles are owned by the leasing company and they will want certain needs met for insurance coverage, such as requiring a higher limit of liability coverage.

How can you prepare for the dealership?

When buying a vehicle from a dealership, be sure you have either already spoken to your insurance company to let them know you may be purchasing a new car soon or have your agent’s phone number on hand.

Once you have a vehicle picked out, the next step will be getting that vehicle added to your insurance policy so that the finance company will have the info they need to complete the loan.

Having your insurance information on hand at the dealership will make for a much more seamless transaction while completing your new vehicle purchase.

Learn how much you can save when purchasing a new or used car through the AAA Auto Buying Program.

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Do you need to update your insurance before you can drive off the lot?

Yes! This should be done before leaving with your new vehicle. You may also want to consider obtaining a rough quote from your agent prior to making your buying decision. This will allow you to balance your budget accordingly if your insurance premiums increase due to this purchase.

Is the insurance rate higher for a new car?

Not necessarily. There are so many different factors that are taken into consideration when rating a vehicle. MSRP and safety features such as airbags, anti-lock brakes and lane departure warnings are just a few examples of how the insurance rate is impacted.  Other factors such as the town the vehicle will be garaged in, driving record and annual mileage can impact the premium as well.

Are there any insurance discounts your agent can help with?

Absolutely. Always ask your agent if there are any discounts available to you that you’re not currently taking advantage of. This could include payment plan discounts such as paying in full or switching to automatic monthly deductions. Other savings could come from bundling your home and auto insurance and going paperless. Depending on the state you live in and your insurance carrier, there are also discounts that may be specific to you, such as being a veteran or AAA member. In some states, completing a defensive driving course could also help to lower your insurance rate.

To find out more about getting insurance for a new car, schedule an appointment with a AAA Insurance agent or get a quote, visit AAA.com/Insurance.

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