If you are the first buyer to buy the first car, do n’t forget car insurance. However, even if you are not like this, you can revisit the basics of auto insurance. So, what exactly do you need to know? Please follow the helpful tips below.
Make car insurance part of car shopping
Before buying a new car, please purchase the car insurance rate; doing so will change your budget.
“You might be surprised by how much car insurance there is. When you are actually in a paperwork dealership, it will lower your car price,” Michelle Megna said. CarInsurance.com. “It’s not time to find out that your monthly payments for cars and insurance are too high for your budget.”
Similar vehicles can derive different car insurance rates. CarInsurance.com found that all other factors being equal, such as the insurance cost of the Honda Civic EX sedan is 8% higher than that of the Ford Focus SE sedan.
Body shape can create more differences. According to CarInsurance.com, the price of the Civic Si coupe with a navigation system and a higher race is 11.8% higher than that of the Civic Si with navigation. Same model, transmission system and function. Therefore, only one difference (that is, body style) will greatly increase your car insurance costs.
Meniya said: “ideally, when you buy a car, you should buy car insurance.” “Now, you will know the budget limits for car payments and insurance payments.”
Choose a car insurance company
Car insurance not only depends on the vehicle you buy, but car insurance companies are also important.
Megner said: “You may find that another company offers a larger discount, or just calculate the risk in a way that is beneficial to your particular situation, thereby making the price more affordable.”
Joe Matetich, a former deputy public legal counsel at the Texas Public Insurance Counsel Office, said: ” [of car owners] It only renews with the same insurance company every year. “
Laura Adams, a senior insurance analyst at InsuranceQuotes.com, said that if you find a better insurance rate, then your current auto insurance company is unlikely to try to exceed your insurance policy to maintain business.
“They usually don’t do this kind of price matching,” Adams said. Insurance companies “draw premiums based on fairly complex algorithms, and they must maintain this business model to remain profitable.”
Tell your insurance provider that you are buying another car
When you buy the next car, insurance may collapse, but experts say most insurance companies will extend your current coverage to new cars for up to 30 days. However, Adams warned that this extension may leave a large gap in insurance coverage.
“If you are only responsible [coverage]She said, or if you have given up this physical insurance for damage to the vehicle, you need to provide comprehensive or collision insurance for the new car. “Make sure to contact the insurance company before driving new cars in batches.”
If you have purchased lot insurance, please shop later.
Menia said that dealers cannot sell insurance because they are not licensed agents, but some partners of insurance companies. She said these policies are “usually not a good idea” because they do not allow you to compare stores and find better prices. Shop around may mean extra work, but doing so can pay off in terms of safety and lower costs.
Protect your stuff
You may have only purchased liability insurance for the old car, but this may cost you a lot of money to repair any damage on the new car. Megner said that research has shown that collisions and full coverage “do not curb costs,” and you can offset some of the losses by increasing the deductible or obtaining insurance discounts.
Megna pointed out that there are many discounts:
- Reduce mileage
- Own multiple cars
- Has certain security or anti-theft functions (eg LoJack system)
- Just to own a new car
Adams has launched a “pay-as-you-go” telematics program, such as Progressive’s Snapshot or Allstate’s Drivewise, which can monitor driving habits and provide discounts based on your safe driving records. Related to this, young drivers or new drivers with excellent results can also enjoy discounts.
Gap insurance is just that. If your car is stolen or owned for a few months before it is owned, the gap insurance will cover the difference between the amount you still owe to the car loan and the insurance expenses reached by your total vehicle.
If you have a positive asset from the beginning, there is no need to make up for the gap, but usually this requires at least a 20% down payment, which is far more than the 5% down payment paid by ordinary buyers. According to Quicken. This will leave shoppers with negative assets for many years.
“There are a lot of transactions now, you ca n’t let go of anything, [pay] Not interested, “Adams said.” Maybe you owe $ 20,000 for the car, [but if] You are sinking into a shipwreck, totaling only $ 14,000. “
Gap insurance bridges the gap, and Megna said that the gap usually only accounts for 5% or 6% of comprehensive and collision insurance. She added that under the usual annual policy of $ 1,400, only $ 20 to $ 30 per year is required.
But remember to cancel it eventually. When your vehicle has positive assets, you no longer need a gap policy. You can estimate this time range by comparing the loan balance on the amortization schedule, for example This is from Bankrate.com, For Cars.com Residual value calculator When the remaining value of the purchased car exceeds the loan balance, you have a positive equity.
“Cheap” cars on the market? Find a car with a price of $ 7,000 or less near you.
Editor’s note: This story was updated on May 23, 2020.
The editorial department of Cars.com is your source for car news and comments. According to Cars.com’s long-term ethics policy, editors and reviewers do not accept gifts or free travel from car manufacturers. The editorial department is independent of Cars.com’s advertising, sales and sponsored content department.