INSURANCE ON A NEW CAR: When to & How to Get It

Photo Credit: prostooleh @Freepik

You have just purchased a brand-new automobile and are now presumably researching insurance options. Insurance for your car is mandatory before you can legally operate it on public roads.

One commits a serious offense if they choose to use a motor vehicle without proper insurance. That’s why we’re going to talk about when and how to purchase insurance for a brand-new vehicle. Read on to learn more about this topic.

Insurance on a New Car

Shopping for a brand-new car is a sensational adventure for almost all motorists. However, before you can officially claim this vehicle as yours, you’ll be required to take care of certain logistics issues, such as providing insurance coverage for your car.

Auto coverage is a legal requirement in almost all states, and car agents will request evidence of an insurance policy before handing over the keys to you.

For individuals who bought their vehicles using car loans, you are required to provide a full suite of insurance policies to satisfy the lender and fulfill state requirements, including collision, comprehensive, liability, and usually uninsured drivers.

This is one way you can go about getting auto insurance for a new car. Ensure you understand what you need before purchasing your policy.

Insurance on a New Car Cost 

Buying insurance for a new car costs a standard fee of $2,150 per year for a good driver with a full-coverage car policy.

New vehicles have more value as compared to older, used cars; furthermore, they have additional features such as backup cameras and Bluetooth speakers, and these features make new cars more expensive to fix. The odds of your new vehicle’s premium being expensive are very high compared to your older vehicles. Car insurance costs are skyrocketing across the country for most motorists.

The average rate of a full-coverage insurance policy is $2,008 a year, or $167 a month, while basic liability coverage standards are $627 a year, or $52 a month. Nevertheless, the cost of your car insurance varies depending on your personal data. This is because providers use these factors to determine your insurance cost. Some of these factors include your location, driver profile, vehicle, and desired coverage when calculating premiums. Let’s look at the factors in depth. 


One major factor that determines your insurance cost is your age. Drivers between the age brackets of 16-25 tend to have more expensive insurance car rates. Prices gradually drop and experience a subtle hike again around 65.


Most providers might set prices based on your gender. This is not the case for insurers in states like California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania. Insurance providers in these states have been prohibited from using gender as a rate determinate factor.

Credit History

If you have good credit, you will always be provided with lower rates. In states like  California, Hawaii, Massachusetts, Michigan, and New Jersey, insurance companies are prohibited from setting rates based on credit score.

Marital Status

For married motorists,  occasionally you’d get lowered or cheaper auto insurance fees compared to single drivers.


Your residential area (both state and city) influences the rate of your car insurance policy. If you live in an environment that records a lot of crash or theft rates, you may see higher fees for insurance premiums.

Car model

If your car type has high theft or crash rates ( this is very common with many sports cars ) your insurance premium just might be more expensive. Your car’s worth is a major factor in determining the rate for comprehensive and collision premiums.

Driving Record

Keeping a very clean driving history will definitely be in your favor because it will provide drivers with cheap insurance rates.  

Those with a driving record of speeding tickets, at-fault accidents, traffic violations, or driving under the influence tend to have more expensive insurance rates.

Driving Habits

Your driving habits can also influence your insurance rates. That being said, driving less usually can result in cheaper insurance rates.

Coverage Level

Every state establishes its own basic insurance requirements, however, drivers can get extra coverage if they want to be fully insured. 


Collision and comprehensive insurance premiums normally include a deductible. Selecting a higher deductible will result in a cheaper premium and vice versa.


The discounts each driver qualifies for have a major impact on the cost of their insurance coverage. Popular auto insurance discounts include a homeowner’s discount, military discount, multiple plan discount, and pay-in-full discount.

How to Get Insurance on a New Car 

Before you go ahead to buy a new vehicle, one vital step you should take first is how to provide insurance coverage for your new vehicle.  If you fail to do this, your car keys might not be given to you immediately after you purchase your car. 

So at this junction, we will be providing you with a step-by-step overview of how to buy car insurance for a new car. 

Compare car insurance premiums.

Firstly, you will need to contact your insurance provider. If you already have an existing car insurance plan, then proceed to inform your provider about the new purchase and inquire from them if it will be financed. 

You can get a premium for the car online or over the phone with a dealer, so you know how much your quote will cost. Ensure you have all the information you need, such as the odometer reading, vehicle inspection number, trim level, and safety features.

Most vehicle insurance premiums include a grace period, where new vehicles are usually protected for a short period. If your quote has a grace period, you are not required to add the new car to your program right away, but you must include it as soon as possible.

Choose Your Coverage

When adding your new vehicle to your car insurance premiums, you are required to choose the coverages you like or those that are necessary. Basically, you’ll require personal liability insurance and underinsured motorist insurance. If you live in a no-fault state, personal injury protection may also be necessary.  

If your car is financed, guaranteed asset protection (gap) coverage is a reasonable and commendable investment. Gap insurance covers the difference between your car’s market worth and the sum you owe if the vehicle is totaled. Some lenders may expect it as well.

Get Proof of Insurance

Immediately after you have included your new car in your insurance plan, chosen your coverages and deductibles, and finalized the purchase, you will need to provide your proof of insurance certificates. 

Most insurance providers permit you to download your insurance ID cards and insurance binder, which can also work as proof of car insurance. The dealership requires you to provide at least one of these certificates before they can hand you the keys. Save a copy of your insurance ID cards in your car or on your phone after taking ownership.

When to Get Insurance on a New Car

You should get insurance for a new car immediately, and this should be before you purchase your new vehicle because most vehicle dealerships request proof of insurance before they can hand over your car keys to you. Nevertheless, you need to get insurance coverage depending on whether the dealer provides a grace period, which gives you ample time after purchase to obtain a car insurance premium.

However, we advise you to compare policies from various car insurance companies before purchasing a new car. If you currently have insurance coverage, you need to get a policy before you can drive your new vehicle.

If you have a plan, you can show the dealership your insurance card to prove coverage. This will enable you to purchase a vehicle, but you still need to contact your insurance provider about your new purchase. Most insurance companies provide a grace period of seven to 30 days to let them know of a new car.

But, even if you have a plan in place, it’s wise to inform your insurance carrier that you are trying to purchase a new vehicle before you buy. The reason why your new car insurance premium is higher is that brand-new autos are more valuable than older vehicles. You should consider the likelihood of the increased premium in your budget ahead of time.

Gap Insurance on a New Car

Gap insurance covers the difference between the remaining balance of your auto loan or lease and the updated market value of your vehicle if someone tows it or steals it. Without Thai insurance coverage, you’d be liable for paying that difference.

Buying this coverage will save you thousands if a major accident totals your new car.  However, if you lease, you should normally expect to consider gap insurance if you have auto loans.

For instance, collision insurance will cover the market value of your car, excluding the collision deductible, if a crash totals your vehicle. If your collision deductible is $500, your insurance carrier will pay you $24,500. But you’d still owe the remaining $5,500 of your auto loan, Gap insurance would pay you $5,000, the difference between the remaining balance of your car loan and the updated worth of your car in the market, so you’d only be on the hook for your $500 collision insurance deductible. Without this coverage, you would owe the lender the remaining money.

Why is new car insurance so expensive?

This is because of the advanced technology and repair expenses. Most new cars have complicated electronics and technology. Although this technology improves driving experiences and enhances safety, it also makes your insurance coverage more expensive.

Is it OK not to buy car insurance?

No, driving a vehicle without insurance is considered illegal, and you could find yourself in a terrible legal and financial crisis if you get pulled over or are involved in an accident.

What should you consider before getting auto insurance? 

Before choosing an insurance plan, you must consider how much insurance premium you need for yourself and your vehicle. You must also determine how much coverage you can afford. Check out the various customer service reputation,  claims service, and responsiveness are also not left out.

Who has the lowest premium rate for vehicle insurance? 

State Farm has the lowest premium rate in the insurance company for car insurance.  Their standard rate of $37 per month for basic coverage.

What are the most important factors in car insurance?

  • Age
  • Marital status
  • Credit score
  • Discount 
  • Location


This article has provided drivers with everything they need to know about how insurance on a new car works. Now you know when you need to get one and how to go about getting it.

New automobile owners can now obtain insurance coverage and begin using their freshly purchased vehicles. 

Insurance on a New Car FAQs

Does credit score affect car insurance? 

Yes. A higher or lower credit score can have a big impact on your insurance rate.

What is the grace period for new car insurance in Illinois? 

The grace period for new car insurance in Illinois is between seven to thirty days in most cases.

What is the best auto insurance for first-time drivers? 

The best auto insurance companies are Travelers, USAA, and Geico,


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