New Car Insurance Considerations

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Unless you walk into a dealership with a briefcase full of money, you won’t technically own the new car you drive away with. Most dealerships have in-house loan companies, which can approve you after running a credit check. Because of this, you don’t really own the car until you pay off the loan. Until then, the car is still owned by the leasing company.

In the same way you might be a little hesitant to hand the keys to your baby over to your friend (especially if said friend won’t get off his cell phone while driving), loan companies realize that sending you out into the world before you fully own your car is a risky proposition. The way they cover for this risk is by requiring you to hold additional insurance on your car until you pay it off. Most states only require you to keep liability insurance which covers others in case you get in a wreck. This notably would not cover your car, which is really the loan company’s car. Because of this, they generally require comprehensive coverage.

This coverage is quite a bit more expensive than liability coverage, which means you shouldn’t run out and grab a Ferrari without considering the additional cost of insurance. If you’re not already sold on the new car you want to get, check around with insurance companies to see which cars will be cheaper to insure. This will not only tell you which cars will give you cheap auto insurance in new york, but which companies can offer you more affordable premiums.

While the make and model of your car play the biggest part in your insurance premium, other factors can net you incremental discounts. Features of the car that lower its monetary risk  also lower its premium. Some examples of these are air bags, car alarms, and theft recovery systems. Of course, a car that is just statistically less likely to be stolen is a good way to go as well.

Many shoppers don’t consider the cost of insurance when it comes to buying a new car, and simply budget for the best monthly payment they can afford. If you not only acknowledge and plan for the cost of insurance, you can avoid a lot of financial headaches.

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