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UPDATED: Mar 13, 2020
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Now that you have just purchased your new car, you may ask, “Can I get cheap new car insurance?” The answer depends on your definition of “cheap.” Shopping around for the best car insurance rates will always yield money-saving results. Use a web-based comparison site to quickly obtain a comparison between car insurance companies and rates. However, certain conditions apply when a finance company or leasing company holds the title to your car. Get started now by entering in your ZIP code and receiving a FREE car insurance comparison!
New Car Insurance
If your new car is financed or leased, you will need to carry a full-coverage policy. Your finance or leasing company will require that you carry at least Collision and Comprehensive coverage. You may want to carry Gap insurance, as well. However, if you bought a new car that is not financed and you own the car outright, you may opt to carry only liability insurance. Liability insurance is the least expensive type of coverage and most states require that drivers carry at least a liability policy.
If you just purchased a car that is really new, and not just “new to you,” you may still want to purchase a full-coverage policy to protect your investment. Collision and Comprehensive together in one full-coverage policy will ensure that your car is covered in the event of a collision, theft or most any other unforeseen incident.
Comprehensive Car Insurance
Comprehensive insurance covers several unfortunate events, such as:
- Falling Rock Damage
- Natural Disasters (check your policy)
Comprehensive coverage is often referred to as “other than collision” coverage.
Collision Car Insurance
Collision coverage pays to get your car repaired or replaced in the event of a collision with another driver. If you are in a collision in an at-fault insurance state, and you are deemed to be the one at fault, your collision insurance will pay to have your car and the other car repaired or replaced.
Collision and comprehensive are combined to create the full-coverage policy. Other types of insurance may also be included on the policy, such as Uninsured Motorist coverage. Uninsured Motorist coverage will ensure that damages caused by an uninsured or underinsured motorist are covered by your insurance.
Both collision and comprehensive coverage carry a deductible. The deductible is the amount that you are responsible for paying out of pocket before the insurance policy pays out. Some policies carry a $500 deductible and others may carry a higher one, such as $1000. The higher the deductible, the lower the policy holder’s premium payments will be.
Gap insurance is coverage that a policy holder retains to cover any repair costs or replacement charges that are not covered by comprehensive or collision. Gap insurance is for individuals who carry a car loan or lease. For example, if you borrowed $10,000 for a car, but the car’s book value is only $8000.
Your car is totaled by a falling rock. Your insurance company pays the $8000 minus the deductible for your car. However, you still owe $2000 on the loan. This is where Gap insurance comes in. Gap insurance will pay the remaining balance on your loan so that you are not continuing to pay car payments, even though the car is no longer running.
Liability covers the other driver and their car, but does not pay for your car repairs or replacement in the event of an accident. Most states require that drivers carry a minimum liability policy. Different states set different limits on coverage that a liability policy must include. For example, a state may require that liability policies carry:
- $50,000 for Bodily Injury to One Person
- $70,000 for Bodily Injury for Two or More People
- $50,000 for Property Damage
These limits would be expressed as 50/70/50. Check with your state for information regarding the minimum amount of liability insurance you must carry in order to drive legally on the roads. When you purchase your Liability Only policy, insurance companies will often sell policies where the limits far exceed the state minimums.
It’s always a good idea to check on the required minimums for your state before purchasing the policy.
You can challenge the policy limits and, in most cases, get the car insurance company to lower the coverage to the state’s minimum.
In short, if your car is financed or leased, you will need a full coverage policy, with both collision and comprehensive. Gap insurance is always a great option if you can manage a small increase in your premium payments.
If you own your new car outright, and especially if your “new” car is only new to you, purchasing Liability Only is your least expensive option. If the car is new in terms of model year, even if you own the car outright, you still may want to purchase full coverage to protect your investment.
So in answer to the question, “Can I Get Cheap New Car Insurance?” depends on what type of insurance you intend to purchase for your new car. Full-coverage will cost a considerable amount more than Liability Only. Add Gap insurance and your rates will increase even more.
However, no matter what type of policy you decide to purchase for your new car, using a web-based comparison site will always provide you with several choices. By comparing companies and rates using the comparison site, you will be able to select the best rates for your budget while purchasing the right coverage for your needs. Enter in your ZIP code and receive a FREE car insurance comparison!