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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Picture of Written by <a href="https://rateretriever.com/about/elizabeth-rivelli/"><span style="text-decoration: underline;">Elizabeth Rivelli</span></a>

Written by Elizabeth Rivelli

Picture of Edited by <a href="https://rateretriever.com/about/alyssa-dicrasto/"><span style="text-decoration: underline;">Alyssa DiCrasto</span></a>

Edited by Alyssa DiCrasto

Last updated: August 5th, 2024

Written by Elizabeth Rivelli

Edited by Alyssa DiCrasto

Last updated: August 5th, 2024

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 does new car insurance cost?

The average cost of car insurance in the U.S. is $2,049 per year. However, the actual cost of car insurance depends on a variety of personal and vehicle-specific factors, including your location, age, credit score, vehicle type, driving record, and more.

In general, the cost of insuring a brand new car is much more expensive than insuring a used car. New cars tend to have a higher value and are more expensive to repair and replace than an older model. And if you lease or finance a new car, you may be required to carry a full coverage policy, which is more expensive than state minimum coverage.

Before you decide to insure a new car, it’s a good idea to get quotes from multiple insurance companies. Comparison shopping can help you find the most affordable auto insurance policy for the vehicle and your personal situation. Take our short quiz to see how much you can expect to pay for car insurance.

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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.

The cheapest new cars to insure

Car insurance premiums can vary significantly depending on the make, model, and year of the vehicle. While new cars are typically more expensive to insure than used cars, there are some brand new cars that are cheaper to insure than others.

Based on recently available rate data, the Subaru Outback is the cheapest new vehicle to insure, with an average premium of $1,839 per year. Other cheap new vehicles to insure include the Subaru Forester ($1,893), Mazda CX-5 ($1,941), and Volkswagen Tiguan ($1,968).

In the table below, you can see the average annual car insurance premium for some of the cheapest cars to insure out of the top 100 most popular 2023 models:

Model	Average Annual Premium
Subaru Outback	1,839
Subaru Forester	1,893
Mazda CX-5	1,941
Volkswagen Tiguan	1,968
Jeep Wrangler	1,972
Chevrolet TrailBlazer	1,989
Honda HR-V	2,002
Hyundai Kona	2,026
Hyundai Tuscon	2,032
Kia Sportage	2,032
Hyundai Tuscon	2,032
Ram ProMaster 3500	2,039
Honda Odyssey	2,047
Subaru Impreza	2,049
Toyota RAV4	2,049
Chevrolet Express 2500	2,062
Buick Encore	2,073
Acura RDX	2,083
Hyundai Santa Fe	2,086
Ford Transit Cargo XL	2,094
Kia Soul	2,101
Honda Pilot	2,106
Ram ProMaster 2500	2,127
Ford Escape	2,133
Ford Transit Connect Passenger	2,144
Toyota Highlander	2,195

Annual rates for a single 35-year-old male, estimated using public rate filings sourced from First Interpreter. Rates do not represent actual quotes. Accurate as of January 2024.

Competitor	Annual Premium
Mazda CX-5	1,941
Jeep Cherokee	2,109
Honda CR-V	1,830
Toyota RAV4	2,049
Nissan Rogue	2,187
Ford Escape	2,133
Chevrolet Equinox	2,121
Subaru Forester	1,893
Hyundai Tuscon	2,032
Jeep Compass	2,128
Kia Sportage	2,032

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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.

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.

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.

Follow these steps to add a new car to your auto insurance policy:

Contact your car insurance company: 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.

Ask about the grace period: 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.

Make the first payment: Before your coverage takes effect on the new vehicle, you will need to make the first month’s payment, which acts as a deposit. Once you pay the initial premium, your policy will become active and your car will be covered.

Get your new ID cards: In most states, drivers are required to carry proof of insurance in their vehicle at all times. Depending on your insurer, you might be able to download digital ID cards through an online customer portal, or access ID cards through the carrier’s mobile app.

Grace period for getting insurance for a new car

If you’re thinking about insuring a new car, it’s a good idea to ask your insurance company about whether your policy has a grace period. A car insurance grace period means that new vehicles are automatically covered for a certain period of time before you’re required to add the vehicle to your policy. Oftentimes, car insurance grace periods cover new vehicles for one week to one month.

Having a car insurance grace period can make it easier to purchase a new car without needing to get car insurance right away. You can visit the dealership, buy a new car, and drive off the lot without contacting your insurance company or making any insurance payments. If your policy has a grace period, the same coverage types and coverage limits you already have typically apply to the new vehicle.

However, keep in mind that a car insurance grace period only works if you have an existing auto insurance policy. If you don’t already have car insurance, you must insure the new vehicle before you can drive it home. Fortunately, many insurance companies make it easy to purchase a new policy online or through a mobile app in just a few minutes.

How to get the Best Car Insurance for a New Car

Written by Elizabeth Rivelli

Edited by Alyssa DiCrasto

Written by Elizabeth Rivelli

Edited by Alyssa DiCrasto

What's on this page?

What is the best insurance for a new car?

How much does new car insurance cost?

Rate Calculator

1 Car Comparison

Why is insurance so high for new cars?

The cheapest new cars to insure

Compare Calculator

Considering a new car? Compare car insurance rates between two vehicles:

2 Car Comparison

Vehicle 1

Vehicle 2

What insurance should I get for a new car?

How much new car insurance is required?

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

Grace period for getting insurance for a new car

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