You may not think about insurance rates while you are on the lot, but doing prior research could sway your decision on which vehicle you will drive home. Insurance premiums are often a costly additional expense to owning a new car. But, you don’t have to compromise style and comfort for that added expense. Buying a used vehicle can be a low cost alternative to buying new, which means that you can receive all the amenities of a premium or luxury vehicle at a more affordable rate.
We know a thing or two about insuring pre-owned vehicles. So we compiled a list to guide you on your search for the best coverage option for you.
- Know your vehicle before you drive it off the lot. The actual price of the car is not the end price. We’ve discussed how fuel economy and warranty coverage could be additional determining cost factors. Insurance is another factor to consider. Who is the manufacturer, and do their parts tend to cost more for repairs? If your insurance company has generally paid out more to repair a certain make and model, it could cost more to insure. Has your vehicle been in an accident before? You will want to take a look at the CarFax report provided. Luxury vehicles tend to cost more to repair because their parts come at a higher price, but luxury vehicles are typically built using higher quality materials which may last longer. Knowing the history and the makeup of your vehicle will help you price insurance premiums before you buy.
- Know how much coverage you need. Do you need comprehensive, collision and liability? What are the requirements in your state? When comparing different premium quotes, be sure that your coverage policies are equal. Liability will cover injuries to others if you are responsible for an auto accident. This is usually the basic requirement for each state. Liability will also cover you and your assets in case of an accident. The higher coverage the better, because you will be responsible for any damages above your policy's coverage limit. Collision insurance covers you if another driver is responsible. Comprehensive coverage pays for damages not related to a collision, such as fire, theft, natural disasters, etc. Collision and comprehensive coverage are typically optional, depending on where you live.
- Know what you bring to the table. There are other factors to consider when pricing insurance. If you have a great credit score, good driving record and have been driving for several years, your insurance premiums will be lower.
Don’t idle your car insurance. Shop around for the best price. It is recommended you shop around for insurance every three years. It is also important that you don’t have any lapse in coverage. To help you transition from your current vehicle to your new one, call your insurance company before you purchase to make sure you are covered for gap insurance.