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How New-Car Shoppers Can Find the Best Auto Insurance Rates

June 12, 2015
Auto Insurance, Insurance
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You’ve compared the fuel efficiency, design features and performance specs, narrowed a dozen models to a few finalists, and researched what the dealer paid down to the penny. But if you really want a good deal for the long haul, there’s one last thing to do: Compare quotes to make sure you get cheap new-car insurance for your big purchase.

It’s that last step that even the most diligent car shoppers often forget.

Yet considering that you’ll be paying to insure the car for as long as you own it, the quotes might help you make a decision on which model to buy. At the very least, it’s a good idea to know what to expect.

Compare quotes for different models

Once you’ve narrowed the field to several cars, compare quotes to pinpoint the ones with the best auto insurance rates. Premiums are based in part on the type of car you drive, and they vary widely, even for similar types of vehicles.

For example, in a rate comparison for six large SUVs, NerdWallet found a 46% difference between the lowest and highest average annual premium. WIth a list price of $83,180 and an average annual premium of $2,138, the Lexus LX was the most expensive of the six SUVs to buy and to insure.

That’s not surprising. A major factor in the premium for a new car is how much it would cost to repair if damaged or to replace if stolen or totaled. Pricey vehicles tend to be more expensive to insure than budget cars. But other variables come into play, too, such as how well the vehicle protects drivers and passengers in accidents, and who tends to drive the car. Do the make and model appeal more to mature, experienced drivers or to young, riskier drivers?

Ready to buy

Once you’ve settled on a vehicle, compare quotes among several insurers for that one car. Make sure the quotes include collision and comprehensive insurance. Both are optional as far your state is concerned, but they’re vital for protecting the investment you make in a new set of wheels.

Collision covers damage to your car caused by car accidents, and comprehensive covers damage from other causes, such as natural disasters, falling objects and run-ins with animals. Comprehensive also covers the car if it’s stolen. A lender or leasing company will require you to buy collision and comprehensive if you finance or lease a vehicle.

Before you leave the dealership

You’ll have to show proof of insurance at the dealership; otherwise the dealer won’t let you drive the new car off the lot. Your current policy probably will cover the new car temporarily if you already have car insurance. Call your insurance agent or company to make sure, and to find out how long that coverage will last. Get new coverage in place for the car as soon as possible.

Remember, though, your current policy limits and coverage will apply to the new car until you get a new policy. If that coverage is skimpy — you don’t have collision and comprehensive, for instance — then it would be a good idea to beef up coverage before you leave the dealership.

If you don’t already have car insurance, then you’ll need to buy a policy before you drive off the lot. Compare insurance quotes and select a carrier to find the best auto insurance rates before you get to the dealership, and then once you purchase the car, the dealer can provide the information the insurance company will need, such as the vehicle identification number.

You can easily compare rates for multiple companies using NerdWallet’s car insurance estimator tool.

Barbara Marquand is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Twitter: @barbaramarquand.

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