If you are buying or leasing a new car what are important factors to keep in mind when insuring it? It is likely the value of your new car will be much higher than the previous car you owned. We will take look at three important factors you should consider when insuring a new car, gap insurance, your coverage levels and competitive pricing.
Gap insurance is a good investment for many new car owners since the average new car loses close to 30% of its value during the first year and about 50% by the third year. Gap insurance protects you against accidents when the market value of your car is less than value of your car loan. The best candidates for gap insurance are those new buyers who are making a low down payment.
For instance, if your new car cost $33,000, the value can decrease to $21,000 in the first year. If you placed a small down payment at purchase, it is likely your car loan will be much higher than the $21,000 at the time of an accident. Gap insurance provides the extra protection in case you are in a loss position with your loan. Gap insurance can be financed from a dealer, however, you will save more money if you purchase from a car insurance company.
A second important area to look at is your coverage levels. A new car will bring a higher value to insure against. If you are transitioning from an older car, it may make sense to decrease your deductible to $250 to make it affordable to keep up your car in case of minor damages or accidents. Collisions will be more expensive, but it makes sense to keep a low deductible to keep your car in good shape.
Another important consideration should be the levels of your liability coverage. Liability coverage covers areas such as medical expenses or car repairs from damages you cause to others in an accident. Liability will also help cover you in case a lawsuit is brought against you. It is a good idea to review your assets, such as equity, stocks and bonds to make sure your liability coverage at least matches up to your asset level.
The final and best tip to keep your premiums low on a new car is to shop around. It is likely your current car insurance company will assign a different risk level on your new car that you had with your previous car. By going to an independent web site you will be able to receive multiple quotes from top insurance companies at the same time.
Leveraging the highly competitive car insurance is a great way to capture lower car insurance premiums. Submitting your information for a quote is free and it will only take a few minutes of your time. One thing to keep in mind is that car insurance is regulated by the state.
It is always a good idea to review specific coverage information that applies to the state you live. In California, visit Best California Car Insurance or in Oregon visit Oregon Auto Insurance for a complete overview of the car insurance requirements in these states.
For a complete list of states have a look at our list of car insurance information by state page.