Does buying a new car increase my rates?

Not always.  The entire industry of insurance uses predictive modeling to understand the risk to premium ratio to create profit while remaining financially competitive with the client. Depending on the vehicle, and client profile (credit, loss history, vehicle, and discounts) the rates will vary.  For example, I had a client trade in their 2013 Toyota for a 2021 Hyundai and pay only 5 dollars more a month, even though the Hyundai would cost the insurance company more if it totaled.

When shopping for a vehicle, here are some things to consider.

Discounts!

Newer vehicles often come with safety features that prior generations of vehicles are lacking.  Rear backing cameras, lane departure technology, auto braking are just a few of the newer features that can help lower your rate.  This is another reason we ask for the VIN, since just the Year make and model, will not have the trim options that come with those vehicles!

When to add your vehicle to your policy.

Insurance policies will often refer to your new vehicle as “newly acquired autos in your policy.  Generally speaking, the policy will cover a newly acquired auto as long as it meets the definition of a personal passenger vehicle, and you intend on keeping or owning for more than six months.  This coverage is an extension of the greatest form of coverage on your policy.

  • Let’s say you own two vehicles, and you wish to replace one of them.
    • if none of the current vehicles have comprehensive or collision, then the policy will not afford comprehensive or collision to the new vehicle.
    • this is why dealerships often want a binder or proof of coverage prior to driving off the lot.  If your current policy doesn’t have comprehensive or collision then there will not be covered until added.
      • some policies have a 4 day period where they will provide collision coverage to newly acquired vehicles but you have be certain this exists!
  • Let’s say you own two vehicles, but only one had comprehensive and collision since the policy has comprehensive and collision, as long as the new vehicles fit the description of a personal auto vehicle, then coverage will likely extend.

What about bodily injury to others or property damage to others?

This type of coverage follows the person and not the vehicle.  For example, if you borrowed a personal auto from a friend and caused bodily harm to a pedestrian, your policies bodily injury limits, and property damage limits would cover the vehice.  Now your friend’s insurance would likely fix their vehicle and then pay for those damages after coverage and liability have been established.