New Car Insurance Coverage

Car insurance for a new car is often more expensive because new cars are more valuable. However, discounts for modern safety features can lower your rates by up to 8%.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 14, 2020

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Here's what you need to know...

  • New cars offer you a nicer ride but a bigger overall bill
  • The higher the value is of your car, the more expensive your car insurance will be
  • New cars can offer you better protection because they often include advanced safety technology
  • New cars may be more expensive, but shopping around can help you find good deals on insurance

When buying car insurance, a policy for a new car is going to be quite a bit more expensive than when you purchase a used car.

Even though you might be excited about the prospect of showing off a new car to your friends and family, you may want to consider a used car in order to ensure that your insurance premiums are within your budget.

Enter your zip code to compare car insurance quotes between new and used cars now!

Nicer Ride, Bigger Bill

There are a couple of reasons why your car insurance for a new car will be more expensive than a used car.

The biggest reason is the fact that in most cases the value of a new car will be higher than a used car, which means that the insurance company will have to pay more if you have an accident.

The good news is that if you have an impeccable driving record, you aren’t going to pay as much as someone who has points on their licenses, a DUI and so on.

Still, the insurance company is going to take into consideration what their costs will be if they have to repair or replace your car in an auto accident.

Another reason that new car insurance is often more expensive than used car insurance is because in many cases, buyers will pay for used cars outright.

Most people have to finance a new car through a lender. Every lender requires new car owners to purchase comprehensive and collision coverage before they will agree to finance the vehicle.

When you sign the contract with the lender, you agree to maintain your car insurance at the level they require.

If you don’t, you could either lose your vehicle or the lender will buy it for you and bill your for it as part of your monthly car payment.

If you simply don’t want to buy a used car, then make sure you take the time to do a car insurance quote before you buy so that you can budget for your insurance expense.

In addition, many insurance companies require a deposit, so you need to have the money available for that as well.

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Better Protection and Safety Features

There are some major benefits to buying a new car that you want to consider.

First of all, most new cars come with safety features that weren’t available just a few years ago. Driving a safer vehicle not only reduces your risk of injury if you are in an accident, but it also provides you with a discount when you do buy car insurance.

Another reason that a new car is an excellent choice is because of warranty options. When you purchase a used car, if it is less than seven years old, then you can buy an extended warranty for it, but it costs money. When you purchase a new car, it comes with a dealer warranty that is included in the price.

While you can also purchase an extended warranty where the new car warranty leaves off, it is not required.

If you choose to buy the extended warranty, then you are protected for the length of the manufacturer warranty, which is usually at least five years and then the extended warranty kicks in, typically for about three more years.

You usually can’t get this type of protection for a used vehicle.

Expensive But Not Impossible to Insure

You can save money on new car insurance by shopping around. Not only should you use a free quote tool like ours to compare car insurance rates, you should look for companies that offer discounts for:

Don’t pay more than you have to for auto insurance. New car insurance can be expensive but if you enter your zip code now, you can compare car insurance rates online!



Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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