How to Estimate Insurance Rates Before Choosing A New Car

Making the decision to purchase a new car is a big one. While you’re likely thinking about the type of car and the interior features that you want, that’s not all that you should be concerned with. You should determine what your estimated car insurance rate will be so that you can factor that amount into your monthly car budget. There are many factors that go into the equation, and it can be quite complicated, but here is a breakdown of the basics.

Decide on a Vehicle

Before you can come up with an estimate for what your car insurance rate will be, you’ll need to narrow down your selection. It’s going to cost a different rate to insure a truck compared to a sedan. Start by determining what make and model vehicle you’re going to be buying. Generally, the more expensive the car, the higher your costs will be. Luxury vehicles with high repair and maintenance costs will come with a proportionately higher insurance cost. Economy vehicles will be cheaper to repair or replace, and will therefore be comparatively inexpensive to insure.

Determine Your Coverage Needs

Next, you’ll need to determine what type of coverage you want. If you’re financing your new car, you’ll likely need to have full coverage on it. However, if you’re paying out of pocket for your new ride, you may opt for liability insurance only. If you want cheap auto insurance, you’ll want to shop around and compare coverage costs.

When you sign-up for car insurance, you may have noticed that they ask you a lot of detailed questions about your vehicle. All the information you provide your insurance company with, as well as the information they get directly from your VIN, will impact your premium.

The Year Your Car Was Made

The year your car was made can impact your premium in a variety of ways. If you just purchased a brand-new car, you may be able to get a new car discount. New car discounts are designed to reward people for driving new cars with newer safety features.

Often, however, your insurance rate will decrease with the age of your vehicle to a certain point, because the cost of replacing your vehicle has gone down. At a certain point, your cost of insuring your vehicle may go up again as your car becomes a classic or lacks important safety features.

The Car Manufacture

Who manufactures your vehicle matters. As a rule of thumb, American made vehicles are often less costly to insure because they are easier to find parts for when they get damaged. On the flip side, foreign vehicles often carry high insurance rates because it can be more expensive to source replacement parts in the event of an accident. This is not always the case, but it is a factor.

The Model of Your Vehicle

Yes, it does matter if you go with a more basic model or with a luxury or sports model. The more basic the model, the lower the insurance cost. Going for a luxury or sports model will not only cost you when you purchase your vehicle, but insuring luxury, and sports models will also cost you more than basic models.

Safety Features on the Vehicle Matter

The safety features on your vehicle matter. The more safety features you have, the more discounts you will enjoy on your insurance coverage. Insurance companies look for safety features such as dual airbags and back-up sensors. Additional modern features, such as smart cruise control and lane drifting sensors, can score you additional discounts.

Car Alarm on Your Vehicle

Car alarms may feel a little repetitive from a consumer perspective. Alarms go off so often that most people ignore them. However, insurance companies still really care about cars having alarms on them. Having an alarm on your car can help you reduce your cost of insurance. Not only that, but cars with more advanced security will be cheaper to insure. Know what kind of features your car has when choosing which one to buy, and be sure to bring them up with the insurance agents you talk to.

All those questions your insurance agent asks you about your vehicle matter, so be sure to answer them correctly. Keep in mind that the fancier the car, the more the coverage will cost.

Get at Least Three Quotes

Once you know the type of vehicle that you’ll be getting and the type of coverage you want, it’s time to get some quotes. You can call your local car insurance agencies or simply hop online. Many car insurance companies offer an online price estimator where you can enter the type of car that you’re going to purchase and the type of coverage that you want. You should get at least three different car insurance price quotes from various companies. The more price quotes you get, the more accurate your estimated price will be.

Average the Quotes

Each car insurance company is going to offer different price quotes. To get an estimate of what you’ll be paying, you’ll want to average out the price quotes that you received. You can easily do this by adding all the quotes together and dividing that number by the number of quotes that you received. For example, if you received the following quotes of $80, $100, and $90, the sum would be $270. You’ll divide $270 by 3 and get an estimate of $90. Buying a new car is one of the biggest purchases most people will ever make. It is worth the time and effort it takes to understand the monthly costs your car will add to your budgeted expenses.

Part of purchasing a new vehicle is knowing what you’re going to pay for your car insurance premium. By utilizing the information above, you can come up with a decently accurate insurance premium for your intended vehicle. Remember that the ultimate insurance price will highly depend on the specific insurance provider that you choose to go with.

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