New Car Insurance Buyers Guide

After the exhausting process of shopping online and scouring car lots, you’ve picked out a new car that’s right for you. It can be a lot of work to just shop for a car, but it’s important to factor in new car insurance before you make your final decision. Whether you lease or buy, the dealer isn’t going to let you drive off the lot without insurance. Make sure you know all about new car insurance before you buy with this guide.

Shop New Car Insurance Before You Buy

First thing is first, the type of vehicle you’re planning to buy will effect your insurance rate. This is in addition to your age, driving record and place of residence. The fluctuation of rates depending on vehicle type is easily illustrated by sports cars. A sports car with a big motor and sporty body is going to have much higher rates than a mid-size sedan. This is because people tend to drive sports cars faster, and therefore they get into more accidents. So if you have your eye on that sports car, just be ready for higher insurance rates. Large trucks and SUVs can also effect your rates. While they may not drive as fast, they are prone to cause greater damage in an accident. As a result, this can cause a spike in insurance rates. Don’t forget about the popular 4×4 vehicles here in Colorado, they can raise your rate as well.

When you’re shopping for that new car, be sure to check in with your agent on rates before you make a final decision. A high insurance rate on a car might just dissuade you from purchasing it.

Coverage Off The Lot

While the dealer isn’t going to let you drive off the lot without insurance, your existing policy will likely provide adequate coverage for the drive home. However, using your existing coverage comes with some drawbacks. For example, if your last car was a older vehicle with a low level of coverage, you’ll only receive the same on your new, expensive car. The coverage of your new car only matches the lowest vehicle on your current policy.

So while it’s fine to use existing coverage off the lot in most cases, make sure you update your insurance to cover the new car as soon as possible. You don’t have to notify your insurance agent immediately when you buy a new car. However you’re are taking a risk if you wait. After all you’ve spent on the new car, it’s not worth it to gamble with coverage.


If you don’t want to risk it or you’re worried your existing policy doesn’t cover your new vehicle, you can contact your agent and complete the new coverage before you drive off the lot. Today your agent can get your insurance set up and emailed to you before you complete the transaction. Square State will help make your new car insurance quick and easy to obtain even when you’re at the dealership.

GAP Coverage

Aside from the basic new car insurance, another coverage to consider before you buy is GAP coverage. GAP coverage is almost always required when you lease a vehicle. It’s not a bad idea to add it when you buy a car outright either. The sad fact is that once you drive a new car off the lot, it depreciates in value quite quickly. So even if you purchased that new vehicle at $38,000, soon after the car may be only valued at $30,000 – $32,000. Add in the interest rates on a loan, and you end up owing more than the car is actually worth.

This becomes a potentially expensive problem if your car is totaled shortly after purchase. Sure it’s rare, but it does happen. Remember, your auto insurance company will only pay out the current value of the car. However with your loan and the price you paid for the new car, you’re still on the hook for several thousand dollars. GAP insurance will protect you from this loss. It can be devastating to see your new car totaled soon after you buy it. Don’t let it be financially taxing as well. Ensure you have GAP insurance shortly after you buy that new car.

Skip GAP Insurance At The Dealer

Many dealerships offer GAP insurance right as you purchase your car. It sounds convenient right? The problem is the GAP insurance offered at the dealership may have much higher rates than GAP coverage through your insurance company. At times, it can even be an astounding 10 times more expensive than coverage through your auto insurance provider. It’s best to say no thank you to the dealer and instead contact your insurance company about GAP. Often they will build it into your new car insurance policy to save you money and make sure you have the proper coverage for your new ride.

Contact Square State Insurance today for a free quote on new car insurance and GAP coverage.

Image one courtesy of Wikimedia Commons.

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