Auto Insurance Shopping: New Cars vs. Used Cars
If you are planning to buy a brand-new car, be prepared to budget for a significant increase in auto insurance. Sure, new cars have new technology, upgraded anti-theft devices, are more fuel-efficient, and maybe electric. One would think that these items would result in a reduction in premiums. The reality is that insurance premiums take into account the year, make, and model of the vehicle and the cost of premiums fluctuate between carriers. New cars carry more cash value and are therefore more expensive to repair and/or replace.
Additionally, auto insurance coverage requirements are different for new cars versus used cars, whether you lease, purchase with a loan, or purchase outright is factored into the premium. State requirements may also differ so be sure to check your state’s requirements.
Items to consider for insurance coverage on new vs. old cars:
Comprehensive Insurance covers damage to your car caused by anything other than an accident. Fire, flood, hail, vandalism, or falling objects can be covered by comprehensive insurance. Deductibles range from $100 to $1,000 as a rule. Older cars, as a rule, do not require this component to be included in your policy.
Collision Insurance
Collision insurance protects you in the event of a car accident regardless of who’s at fault. Collision Insurance typically requires a deductible amount ranging from $100 to $1,000. Most new cars will require collision insurance regardless of the mechanism of payment due to the cost of repairs and replacement parts.
Personal Injury Protection (PIP)
If you or your passengers are injured in an accident, PIP is the part of your auto insurance policy that will help to cover the resulting medical bills. PIP requires a deductible amount that can vary from $100 to $2,500 on average. PIP is required in some states, so be sure to know your state’s requirements. You may still purchase PIP or a form of medical gap insurance, regardless of whether your state requires it. Check your loan or lease documents to see if these are required.
Uninsured Motorist Property Damage Protection
If your automobile or other property is damaged by an uninsured motorist, this coverage will help to repay your loss on an approved claim. This protection does require a deductible that ranges from $100 – $2,000. New cars may be required to cover this protection due to repair and replacement costs.
Uninsured Motorist Bodily Injury Coverage
This coverage exists to assist you with your medical costs, and those of your passengers if you’re injured in an accident with an uninsured motorist or one who doesn’t have enough coverage to pay the medical bills. There’s no deductible for this insurance coverage.
Gap Coverage
This coverage is helpful for people who owe a vehicle loan as it’s designed to cover the difference between the loan amount and the value of the car if it’s badly damaged or even totaled in an accident. New car buyers should consider purchasing Gap coverage, and owners of older vehicles should analyze the payments remaining on the vehicle to make this decision.
Make a list of what coverage you are required to have and what you would like to include on your policy; then visit Nsure.com. You will be able to compare policies from 50 of the most reputable insurance carriers all in one place. Be sure with Nsure!
