Getting car insurance for your new car is an integral step in the purchasing process. Here's what you need to know before you buy.
Should I get insurance quotes before buying my new car?
Yes. Even if you have a current car insurance policy, it'll pay to check out other providers' quotes or speak with an agent if you plan on buying a new car.
Since the type of vehicle you want to cover will affect your rate, researching new car insurance can also help you decide which car to buy. Plus you'll know who to contact when it's time to finalize your coverage. And by comparing quotes from multiple providers, you'll be able to find affordable coverage that meets your needs.
You can get your new car insurance quote online through Esurance — and get quotes from other leading providers without leaving the site.
Do I need insurance to buy a new car?
Yes. The dealership won't let you roll off the lot without proof of insurance. If you're financing your new vehicle, the bank or other lender also requires proof of coverage.
Can I insure my car before I drive it off the lot?
If you're presently insured, proof of your current insurance should suffice since most policies will cover your new car for a limited time. If you're not certain your existing policy will cover your new car, check with your agent or your policy's declarations page. Otherwise, you'll need to purchase new coverage. The dealership will provide your new vehicle's info to your insurer and you can complete your purchase before you drive away.
Does dealer insurance cover my new car?
No. Dealerships have insurance to cover their cars, and their cars alone. Once you purchase the car, it's yours to insure.
I want to lease a new car. Are there specific insurance requirements for leasers?
The leasing entity determines insurance requirements, but most new car insurance policies for a leased car require comprehensive and collision coverage. You'll also need auto loan/lease (or gap) insurance. Many lease contracts actually include auto loan/lease (or gap) coverage by default. If yours doesn't, shop around — most car insurers, including Esurance, offer auto loan/lease (or gap) coverage too.
What is auto loan/lease (or gap) insurance? Do I need it?
Auto loan/lease (or gap) insurance is usually only required on a lease, but it can be a great purchase for those buying a new car as well. If you buy or lease a new car and get in an accident that renders it a total loss, your insurer will pay the amount defined in your total loss coverage declaration — but chances are you'll still owe your lender.
Why? Because, due to a combination of financing and depreciation, many drivers end up owing more on their car than it's actually worth.
Auto loan/lease (or gap) insurance covers the disparity between what you owe on your new or leased car and the amount your insurer will pay in the event of a total loss. For example, let's say you bought a new car, financing it with a loan of $30,000. Two weeks later the car is valued at $25,000 when an accident totals it. Your insurer pays the value of the car, leaving you with a $5,000 bill. But if you've got auto loan/lease (or gap) insurance, that bill won't be coming out of your pocket.
When you're shopping for new car insurance, ask about auto loan/lease (or gap) coverage. Many insurers, including Esurance, offer auto loan/lease (or gap) coverage that you can pay for along with the rest of your policy — a great option since gap insurance through your dealership will most likely cost more.
Are dealerships supposed to notify your insurance company if you buy a new car?
No. When you buy a new car, it's up to you to inform your insurance company of the purchase and modify your policy to match. As an Esurance customer, you'll be able to log into your account anytime to quickly and easily update your policy.
If I buy a new car, will my existing insurance cover it?
The majority of car insurance policies cover your new baby for a short period defined by the insurer or your state's requirements. Your existing policy might not be a great fit for your new vehicle, so it's a good idea to modify your coverage as soon as you can.
Can I transfer my existing policy to a new vehicle?
Yes, but you'll need to update your policy to cover the new car. Since the car you drive affects your rate, your insurer will tailor the policy to fit your new circumstances.
How much time do I have to add a new car to my existing car insurance policy?
That depends on your present insurer and your state's requirements, but most policies will cover a newly purchased vehicle for 14 to 30 days. Check with your provider to find out what their exact requirements are. You can contact us at 1-800-ESURANCE (1-800-378-7262).
Can I backdate my policy to include my new car as of the date I purchased it?
Most insurance companies, including Esurance, don't "backdate" coverage in the traditional sense of the word. But if you have physical damage coverage (i.e. comprehensive and collision coverages) on your existing Esurance policy, then your new ride will be automatically covered for 30 days as long as your situation meets a few conditions: you must make sure to add your new ride to your auto policy within 30 days of purchase, it can't be insured by any other company in addition to Esurance, and all other vehicles you own must also be covered by Esurance. Your policy may require some adjusting (coverage limits, discounts, and more) to accommodate the new vehicle, so be sure to contact us as soon as possible.
And if you don't currently carry comprehensive and collision coverages on your Esurance policy — and you don't add your new ride to your policy within 30 days of purchase — then you're at risk for being financially responsible for repair or replacement of your new ride if an accident occurs. But we can always add your car to your policy anytime so you'll have added financial security and peace of mind in the event of a claim.
Will my premium go up if I buy a new car?
That depends on the type of car and the coverage options you select. Insurers consider some models more dangerous or more likely to attract vandals while others are deemed safe and reliable. So the type of car you buy can either increase or lower your rates.
Similarly, any changes you make to your policy will also affect your rate. If you increase your deductible, your rate may go down; increase your limits and it may go up.
Get your quote online or log into your Esurance account to vary coverage options and see how they affect the final price.
I'm planning to buy a car for my 16-year-old daughter. How high will her insurance rate be?
Insurers consider young and new drivers to be high-risk customers because of their lack of experience and the driving histories of other young and new drivers. Call 1-800-ESURANCE (1-800-378-7262) and one of our experts will help you find the right coverage.
How can I save on my 16-year-old's new car insurance?
There are several ways to save on new car insurance for your teenager. First, make sure she takes a driver's education course. Her school probably offers one; if not, independent companies offer high-quality driver's training. Good students may also qualify for the Good Student discount if their overall GPA is 3.0 (B) or higher. If you're an Esurance customer and want to discuss available discounts, give us a call at 1-800-ESURANCE (1-800-378-7262).
Keep in mind that the type of car your daughter drives influences the insurance premium. You may be able to save by getting your daughter a small SUV or sedan rather than that speedy sports car.
Should I add my 16-year-old to my existing policy or get her a new car insurance policy of her own?
This is really up to you, but there are a few things to think about when making this decision. If you call 1-800-ESURANCE (1-800-378-7262), one of our licensed agents will be able to tell you how both options will affect your rate.
Note that, if you're adding a new car as well as a new driver, you should be able to grab a Multi-Car discount.
Is insurance for a new car cheaper than insurance for a used car?
Your insurance quote depends on so many factors that we can't give a universal answer here. But we can tell you that used car insurance isn't always cheaper than new car insurance. After all, factors like mileage and repair history may increase a used car's cost to insure. A safe and reliable new 4-door may be much cheaper to insure than a Mustang from the classic muscle-car days.
In the end, the only way to know for sure what your rate will be is to get a quote. If you're debating between a used and a new car, you can quote them side by side to see how their rates stack up. Just be sure to select similar coverages, limits, and deductibles to make sure you're comparing apples to apples.
Should I compare car insurance quotes for my new car?
Comparing car insurance quotes is one of the easiest and most efficient ways of ensuring you get the best rate and the coverage options that fit you best. Esurance makes comparing quotes easy — once you've got our numbers in hand, you'll be able to compare our rate with multiple companies' without even leaving our site. And if you see a policy that works better than ours, you can continue to buy it directly online.
Can I insure my new car with a different insurer before my current policy ends?
Yes. Many companies, Esurance included, provide a discount for switching to them. Just make sure that you time your new policy's effective date to coincide with the old one's end date so your coverage doesn't lapse. Even a one-day lapse in coverage can bump up your premium.
Does the type of car I pick affect my rate?
Yes. Make and model are among the most important factors insurance companies consider when offering quotes, but other features of your desired car matter too. Keep the following in mind when selecting a new car to buy:
- What your car says about your driving habits. Parents of young children often go for reliable minivans and smaller SUVs, and their safe driving habits mean savings for all. Sports car fans, on the other hand, are usually in it for the speed and performance, and rates on those types of cars show it.
- The latest model will cost more to insure. Buying last year's model may lose you a style point or 2, but it can help you save on car insurance.
- Check safety records. The National Highway Traffic Safety Administration offers invaluable info on model safety and the National Insurance Crime Bureau releases yearly reports on the most-stolen cars. Rates for cars with poor safety histories and frequent thefts will be higher.
- Add safety features. Things like antilock brakes and LoJack security systems can help you lock in significant discounts.
- Consider the hybrid. While hybrids feature parts and systems that can be expensive to repair or replace, their drivers tend to be safety-conscious, leading to lower rates.
The good news: Despite rumors to the contrary, the color you pick won't impact your insurance rate.
Can I save by adding my new car to an existing car insurance policy?
Almost certainly. Esurance offers the Multi-Car discount for customers who add more than one car to the same policy.
If I buy a new car and get into an accident, will my car insurance apply?
Yes, your car insurance will apply as long as your car is still within your policy's automatic coverage period, you already added it to an existing policy, or your new policy's in effect.
What happens if I total my new car?
If you bought comprehensive and collision coverage, you'll receive a total loss reimbursement equal to your car's actual cash value, minus your deductible. If the car was brand new and financed, the amount you owe on the car may exceed its value. If you're concerned about that, you can get auto loan/lease (or gap) coverage through Esurance.