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How to get the Best Car Insurance for a New Car

Buying a brand-new car can be an exciting experience, but it’s also one of the biggest purchases you can make. To protect your investment, it’s important to have a full coverage car insurance policy that provides adequate protection for your new set of wheels. Before you purchase car insurance for a new vehicle, here are some things to keep in mind.

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Our rates are based on public rate filings obtained by analytics company First Interpreter. While we may partner with some of the carriers you see on our site, we maintain editorial independence and it does not affect the rates you see. Read more about our rating methodology or see our rigorous editorial policy. 

Written by Elizabeth Rivelli

Reviewed by Alyssa DiCrasto

Last updated: July, 2023

What insurance should I get for a new car?

There are many different types of auto insurance. At a minimum, drivers in most states are legally required to carry personal liability insurance, which includes bodily injury and property damage liability insurance. In no-fault states, drivers are required to carry personal injury protection (PIP). 

However, these policies do not provide any protection for your vehicle when you cause an accident. If you’re insuring a brand-new vehicle, it’s a good idea to purchase optional policies that include physical damage coverage. Below are a few optional policies that you might consider buying for a new vehicle: 

  • Collision insurance: Collision insurance pays for your vehicle’s repairs when you cause an accident. The coverage limit for most policies is the actual cash value (ACV) of your vehicle, which includes depreciation. Collision insurance will also pay for a new vehicle if your car is totaled in an at-fault accident.


  • Comprehensive insurance: Comprehensive insurance is sometimes called other-than-collision coverage. It pays for your vehicle’s repairs after an unexpected incident that wasn’t your fault, like theft, vandalism, a tree falling onto your car, or a natural disaster, like a fire, flood, or earthquake. Like collision insurance, the coverage limit for most comprehensive insurance policies is the ACV of your car.


  • Gap insurance: If you are leasing a new car or are financing a new car with an auto loan, gap insurance can be beneficial. If your car is totaled in an accident or other covered claim, gap insurance pays the difference between your car’s diminished value and the amount you still owe.


  • New car replacement coverage: New car replacement coverage provides a higher payout if your vehicle is totaled and you need a new car. In most cases, this policy will compensate you for the cost of a new car of the same make and model as your old one. 
  • OEM coverage: Original equipment manufacturer (OEM) coverage pays the extra money to repair your vehicle with original parts, rather than aftermarket parts. Unless you have this coverage, your car might be repaired with aftermarket parts, which may not be as high quality as the OEM components.


  • Roadside assistance: This policy pays for basic roadside repairs, like towing, flat tire changes, battery jumpstarts, fuel delivery, and more. 

What is the best insurance for a new car?

The best insurance for a new car is different for every driver. It depends on a variety of factors like location, vehicle type, and budget, among other things. To make sure you’re getting the cheapest car insurance for your situation, it’s a good idea to compare multiple insurance companies. 

If you’re shopping for new car insurance, start by taking our short quiz to see your best matches. We’ll show you personalized rate quotes for the type and amount of coverage you need from the top providers in your area. 

How much new car insurance is required?

In most states, drivers are required to have a minimum amount of car insurance on new vehicles to meet state laws. However, it’s a smart idea to purchase more coverage than what’s required, especially if you have a brand-new car. 

For some policies, like liability insurance and PIP, you can choose your own coverage limits when you purchase the policy. Other policies, like collision and comprehensive insurance, often have less flexibility because your coverage limit is based on your car’s value. 

However, one way to get higher physical damage coverage limits on your vehicle is to choose a replacement cost value (RCV) policy. If your vehicle gets damaged or totaled, an RCV policy reimburses you based on the replacement value of your car, which does not include depreciation. For comparison, an ACV policy (the default option) factors your car’s depreciation into your payout, so your insurance company will pay up to your car’s current value, not how much you paid when you purchased it. 

Another thing to consider when getting new car insurance is your deductible. Some car insurance policies, like collision and comprehensive insurance, have a deductible that gets subtracted from your claim payout. Choosing a lower deductible means you get the highest claim payout, but it also increases your monthly premium.   

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How to add a new car to my car insurance policy?

If you already have car insurance, it’s fairly easy to add a brand-new car to your policy. You can even do it at the dealership before you drive off the lot. 

Call your car insurance company and request to add the new vehicle, or log into your online customer account and add it yourself. In either case, you will be asked to provide the vehicle’s information, like the make, model, and year, as well as the VIN number.  

While some car insurance policies automatically cover new cars for a short period of time, others don’t. If you don’t have temporary new car coverage, you will need to formally add your new car to your policy before you can legally drive it.

Why is insurance so high for new cars?

The cost of car insurance is high for new cars because new cars still have most of their value. If something were to happen to your brand-new car, your insurance company would have to pay you a big settlement to cover the damages. As a result, insurance companies charge more to insure new cars to offset the potential chance of a claim. 

When you insure a used car or an older car, the car has already depreciated significantly and lost a large amount of its value. If a used car gets damaged or totaled, the insurance company will pay a much smaller settlement to the vehicle’s owner, so there’s less risk. 

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