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Main sockets:
- When you buy a new car, you don’t have to automatically buy a new insurance policy. Most insurance companies allow you to transfer your existing policy to the new car with the required changes.
- Most insurance companies offer a grace period of 7 to 30 days when purchasing a new car which gives you time to update your policy. Check with your carrier to see their time restrictions or what their policy includes.
- Keep in mind – buying a new car is the perfect time to re-evaluate your car insurance coverage and get quotes with the best rates and discounts available.
When you buy a new car, you need to insure it before you drive. The question becomes whether you should transfer your existing insurance to a new vehicle or if you cancel the existing policy and start a new one with better rates. The bottom line is that you can do either.
To get started, consider your current needs, including the terms and conditions of your current policy, how much you pay each quarter (eg, monthly, quarterly, or semiannually), and the amount of deductible you’ve selected. Once you have this information, you can decide if you want to stay with your current insurance company or look for a new one.
Let’s take a look at both alternatives.
5 steps to transfer insurance to a new car
1. Contact your insurance provider.
A phone call to your insurance agent lets them know you’re buying a new car and are interested in switching over new car insurance. Even before your new car purchase is complete and the ink is dry, you can set up a new car policy when you drive away.
2. Get an updated quote based on your new vehicle.
Once you’ve decided to purchase a new car or truck, getting an updated quote is simple. In fact, finding out the cost sooner rather than later may help you decide whether to do more research before committing to a new policy.
When requesting an updated quote, your insurance agent will need the following information:
- Make and type
- manufacturing year
- Vehicle Identification Number (VIN)
- Safety features
- Collision warning or blind spot detection
- Anti-lock braking system
- Anti-theft device
- GPS tracking system
- Adaptive cruise control
- Lane departure warning system
- Airbags
- rear view camera
3. Examine your coverage needs.
Now is a great time to assess your coverage needs to see if it is a good fit for your new car or truck. For example, you may want to review these things:
- Your current discount may be too high or too low. You may have had a huge discount when you finished your original policy to keep costs down, but now you can afford more and preferably a lower discount.
- If you are financing your new car, make sure you have coverage limits that meet their requirements. For most finance companies and banks, this means full coverage (we’ll explain it in detail later).
- Consider buying gap insurance. In the event of an accident where your car was pooled, this will help pay the difference between the market value of your car and what you owe on the remaining loan. This is often different and can be an unexpected burden at the worst possible time.
4. Ask about discounts.
Your insurance company has discounts that can improve the cost of your policy. Later in this article, we review some common discounts that you may qualify for and that will save you money.
5. Start the conversion.
Once you’ve completed the evaluation and you’ve decided to move with your current insurance carrier, a call to your agent should get the job done. Make sure you understand the upfront costs that may be associated with your new car insurance.
4 steps to getting a quote for your new car insurance policy
If this is your first car or you want to explore insurance quotes to save money, consider getting an online insurance quote with your specific information. Here are four steps to finding the best rate.
1. Gather your information.
- Make and type
- manufacturing year
- Vehicle Identification Number (VIN)
- Personal information, including personal demographics, whether you own or rent your home, annual salary, education level, and the names and information of all persons who will be included in the policy.
2. Visit an online marketplace that features a bidding engine.
For example, einsurance.com offers online auto insurance quotes where you add your information to their rate engine and receive several auto insurance quotes that are easily comparable.
3. Choose the appropriate coverage levels for your new car.
Depending on the age of your car and if you pay cash or finance your new car, you have options on what levels of coverage you want to insure.
4. Compare car insurance rates.
Once we receive your quotes, it will be easy to compare costs. Be sure to include any discounts in the final analysis that may have to be offered by individual insurance companies as they may vary.
What to expect in terms of cost when transferring insurance to a new car
Since your new car is probably worth more than your old car, there is a good chance that the cost of insuring your new car will increase. It’s always a good idea to get a quote before checking out to make sure there aren’t any surprises. Make sure the incremental cost is within your budget before you commit to selling.
As a measure, the Average cost of insurance It’s $1,771 a year for full coverage which is $148 a month although many things can change that number, including your choice of a new vehicle, your driving history, and even the region of the country where you live.
A full coverage policy will have coverage limits of 100/300/100. Coverage limits basically say how much your insurance company will pay for an accident. You will have to pay any additional money.
You can decipher these numbers as follows:
- responsibility – Protects you if you or your vehicle causes damage to someone else’s property or vehicle and will help cover that person’s medical costs up to the covered amount. It does not cover damage to your vehicle or personal medical costs. While most states have minimum requirements on how much liability coverage a person needs, it is always a good idea to carry more than your state recommends which can reduce your out-of-pocket costs in the event of an accident.
- collision – Covers your vehicle if you are involved in an accident with an object, vehicle or other moving or immovable person regardless of their fault.
- Inclusive – Protects your vehicle from things your liability or collision coverage does not cover, such as theft, vandalism, severe weather, collision with an animal, or fire.
So, if you have 100/300/100 coverage, that means you’re covered up to $100,000 for liability, $300,000 for collision, and $100,000 for comprehensive.
You may have additional coverage options in your state including uninsured and underinsured driver coverage and personal injury protection coverage, along with rent payment, gap coverage, towing coverage, and more. This is where a solid relationship with a good insurance agent can pay dividends in cost savings and good coverage.
State laws versus your insurance company
Insurance is mandatory in most states while many carriers allow you time to transfer your insurance from an old car to a new one. Before driving your new car, make sure you meet state guidelines. Virginia and New Hampshire do not have mandatory insurance but do require that you purchase a bond.
If you don’t know your state’s insurance requirements, you can find a comprehensive list here. This also includes vintage cars, RVs, motorcycles, boats, ATVs, etc.
Understand the benefits of transferring insurance to your new car.
When you transfer insurance to a new car, you save time and money. If you have an established relationship with a premium insurance agent, it may be in your best interest to continue in this business in the future.
They will also ensure that your insurance will not expire or that you will be driving without coverage for any period of time.
Ways to save money on a new car policy
Car insurance is never cheap, and it always helps to find ways to cut costs when possible.
Save costs with a higher insurance deductible
The higher the deductible on the car insurance you choose, the lower the premiums – sounds crazy, right?
You can choose a deductible anywhere from $0 to $1,000 or more, and the higher it is, the lower your costs. Deductibles work by offsetting the insurance company’s costs. For example, if you suffer $3,000 in damage to your car and have a deductible of $500, you will pay the first $500 and your insurance will pay an additional $2,500 for a total of $3,000.
While the average annual deduction in the United States is $500, keep in mind that it applies to every situation. So, if you have two accidents a year, you’ll owe $1,000 for repairs. Basically, the whole idea of the deductible is to stop people from filing unnecessary claims because they cost to share with the insurance company – so everyone has a ‘look in the game’.
The good news for you is that if you choose a higher deductible, your premiums will be lower. One cautionary note – when opting for a large discount, it’s always a good idea to keep that amount on hand (in savings or investment) so that it’s available if needed.
Always ask about discounts
Auto insurance companies compete in a very hot market, so they are invested in keeping their customers long-term and encouraging them to insure everything in their life with each of the company’s products. One way to attract customers and keep them engaged is to offer discounts. While each company offers different options, here are some of the most popular:
- Multi-policy discounts – With your car, home and life insurance, you are entitled to a discount.
- Driver Safety Discounts – can be based on your typical driving record or being accident-free, as well as by completing defensive driving courses (particularly for seniors)
- Occupational or Military Discounts – Many companies offer discounts if you work in the military or have a professional certification, such as a doctor or attorney.
- Good Grade Discounts – If you have a student driver, good grades can mean as much as 5% to 25% with a B average.
- Payment related discounts – Many companies offer discounts if you pay your premium in full at the beginning of the period. There are also discounts of 1%-2.5% for signing up for autopay.
- Vehicle Safety Discounts – Today, vehicles have a lot of safety equipment standards and insurance companies still give discounts on anti-theft equipment, anti-lock brakes, negative restraints, or daytime running lights.
- Usage-based software – Several companies, including Progressive (Snapshot) and Allstate (Drivewise) have onboard diagnostic readers that monitor your every move. Using this type of tool can earn you a 6% discount on average, but watch your braking habits.
Get a new quote for your new car
Whether you choose to transfer insurance to a new car or look at current rates through an insurance marketplace site, it is important that you get the most cost-effective coverage available.
The tools at einsurance.com allow you to compare auto insurance quotes (as well as other types of insurance products, such as health, life, business, and home), search case advice, and review financial services, such as auto and real estate loans. They also have a tool that allows you to directly compare insurance companies based on your insurance type and zip code.
Get a car insurance quote comparison today or call 855-372-7400 to speak with someone directly, and – enjoy your new car!
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