You are sitting in your new car. It smells nice. The car feels good to sit in and to drive. It is time to drive it off of the lot. The wheeling and deal is done. Just before you put the pedal to the metal, pause to make sure that you have it properly insured. When purchasing a new car, it is critical to get it insured to protect your huge investment in modern transportation technology.
1. Make sure that the insurance is in force before leaving the car lot.
Accidents can and do happen almost anywhere. You would not be the first if you were to have a wreck as you exited the dealer’s lot. With sufficient insurance in place, you can drive off of the car lot and enjoy your purchase without nagging fears that you could be about to lose your life savings.
2. If possible, buy a policy that will cover the full amount of your new car loan in the event of a total loss.
It is well known that the loan amount on a new car will rarely be covered by the true worth of the car itself. Some insurance policies will only pay the actual cash value of the car. With a new car, this can leave you owing thousands if the car is declared a total loss. Some insurance companies offer an option to their policies to increase this coverage to the amount of your new car loan.
3. Buy collision insurance with the lowest deductible you can afford.
The cost of getting your new car licensed and on the road will be large. If you were to have an accident, you need the deductible on the repair bill to be as low a possible. Even a $250 deductible should not be considered too low to go for if you have the funds. Buying collision insurance with high deductibles may seem wise when you see smaller premiums, but you may have trouble paying for the repairs after a claim if the deductible is too high.
4. Make sure that your policy includes comprehensive insurance.
Many people do not realize that without comprehensive, you may not get paid if your new car is stolen. Storm and hail damage will not be covered. Glass breakage from rocks and vandalism will all be paid for from your personal pocketbook. Get this type of coverage to take care of these potential eventualities.
5. If possible, buy comprehensive insurance with no deductible.
It is hard to find this type of policy. The good part about a comprehensive with no deductible is that when a rock hits your windshield, it will be replaced at no charge to you. If you cannot find or afford no-deductible comprehensive insurance, make sure that your policy will do windshield glass repair without any cost to you. Most companies add this feature on without an additional charge.
6. Ask about the cost of extended car warranty insurance.
A lot of people may not consider this as insurance, but it is. Frequently, this is not a particularly good deal because of the narrow window of coverage that is offered. Sometimes, the dealer will offer a genuinely great warranty. So, it does pay to at least ask about the insurance.
7. Be certain that your car insurance company has notified your lender of your coverage immediately.
While most lenders are a little soft about how quickly this information arrives, it needs to be sent quickly so that it is not overlooked. If you bank does not receive notification of your insurance in time, you will receive stern letters warning you that they are preparing to buy collision insurance for you and send you the bill. Too much delay could result in you owing money for double insurance.
8. Use caution about additional coverages offered by the dealer like body rust-through policies.
Unlike the extended repair warranties, these other offerings rarely measure up in value to their cost. Most of them are already a part of your new car warranty in one form or another. Special anti-rust policies will seldom be needed because most new cars are built well enough to resist excessive rust until after the policy would expire.
9. Check on the cost of insurance for your new car before you buy the car.
The cost of new car insurance can be somewhat more than your old used car. If you have an idea of what the insurance will cost before you buy the car, you will have less chance of overspending for your new car. It will let you have a better idea of what you can afford as a car payment.
10. Determine which natural disasters are covered by your comprehensive.
Some comprehensive policies exclude items like flooding and some types of storm damage. You really do not want to be surprised by a declined claim after a major disaster. Checking ahead of time regarding the precise areas of coverage will help you feel confident about your insurance protection.