When you’re in the market for a new car, there are many factors to consider. From the make and model to the color and features, there’s a lot to think about. But one important consideration that’s often overlooked is the impact that a new car can have on your insurance premiums. The good news is that the increase in insurance premiums is not as drastic as you might think, but it’s still important to understand how much your insurance will go up with a new car.
In this article, we’ll explore the factors that affect insurance premiums for new cars, how much they typically increase, and what you can do to minimize the impact. Whether you’re a first-time car buyer or a seasoned driver, this information will help you make an informed decision when it comes to your insurance coverage.
Factors That Affect Insurance Premiums for New Cars
There are several factors that insurance companies consider when determining your premiums for a new car. Here are some of the most important ones:
Make and Model
The make and model of your car can have a significant impact on your insurance premiums. Cars that are more expensive to repair or replace, or those that are more likely to be stolen, may have higher insurance premiums. For example, a luxury car like a Mercedes-Benz or a high-performance car like a Porsche may have higher insurance premiums than a more affordable car like a Toyota Corolla or a Honda Civic.
According to a study by the National Association of Insurance Commissioners, the average annual insurance premium for a Mercedes-Benz is around $2,000, while the average annual premium for a Toyota Corolla is around $1,200. This is because the Mercedes-Benz is a more expensive car to repair or replace, and it’s also more likely to be stolen.
Age of the Driver
The age of the driver is another important factor that insurance companies consider. Younger drivers, who are more likely to be involved in accidents, may have higher insurance premiums. For example, a 20-year-old driver may pay around $2,000 per year for insurance, while a 40-year-old driver may pay around $1,500 per year.
Driving Record
Your driving record is also an important factor that insurance companies consider. If you have a clean driving record, with no accidents or traffic violations, you may be eligible for lower insurance premiums. On the other hand, if you have a history of accidents or traffic violations, your insurance premiums may be higher. (See Also: Whats Cheapest Car Insurance? For Your Budget)
Location
The location where you live can also impact your insurance premiums. For example, if you live in an area with a high crime rate or a high incidence of accidents, your insurance premiums may be higher. On the other hand, if you live in an area with a low crime rate and a low incidence of accidents, your insurance premiums may be lower.
Coverage Levels
The level of coverage you choose can also impact your insurance premiums. For example, if you choose a higher level of coverage, with more comprehensive coverage and higher limits, your insurance premiums may be higher. On the other hand, if you choose a lower level of coverage, with fewer comprehensive coverage and lower limits, your insurance premiums may be lower.
How Much Do Insurance Premiums Go Up with a New Car?
The amount that insurance premiums go up with a new car can vary depending on several factors, including the make and model of the car, the age of the driver, the driving record, and the location. However, on average, insurance premiums can increase by around 10% to 20% when you buy a new car.
According to a study by the Insurance Information Institute, the average annual insurance premium for a new car is around $1,500. This is compared to around $1,200 for an older car. The study also found that the average annual insurance premium for a luxury car is around $2,000, while the average annual premium for a non-luxury car is around $1,000.
What Can You Do to Minimize the Impact of a New Car on Your Insurance Premiums?
There are several things you can do to minimize the impact of a new car on your insurance premiums:
Shop Around for Insurance Quotes
One of the best ways to minimize the impact of a new car on your insurance premiums is to shop around for insurance quotes. By comparing quotes from different insurance companies, you can find the best rate for your new car. (See Also: What Do I Need to Renew My Car Insurance? Essential Checklist)
Consider a Higher Deductible
Another way to minimize the impact of a new car on your insurance premiums is to consider a higher deductible. A higher deductible means that you’ll pay more out of pocket if you’re involved in an accident, but it can also lower your insurance premiums.
Drop Unnecessary Coverage
Finally, you can also minimize the impact of a new car on your insurance premiums by dropping unnecessary coverage. For example, if you have a older car, you may not need comprehensive coverage. By dropping this coverage, you can lower your insurance premiums.
Conclusion
In conclusion, the amount that insurance premiums go up with a new car can vary depending on several factors, including the make and model of the car, the age of the driver, the driving record, and the location. However, on average, insurance premiums can increase by around 10% to 20% when you buy a new car. By shopping around for insurance quotes, considering a higher deductible, and dropping unnecessary coverage, you can minimize the impact of a new car on your insurance premiums.
Recap
Here’s a recap of the key points discussed in this article:
- The make and model of your car can have a significant impact on your insurance premiums.
- The age of the driver is another important factor that insurance companies consider.
- Your driving record is also an important factor that insurance companies consider.
- The location where you live can also impact your insurance premiums.
- The level of coverage you choose can also impact your insurance premiums.
- On average, insurance premiums can increase by around 10% to 20% when you buy a new car.
- You can minimize the impact of a new car on your insurance premiums by shopping around for insurance quotes, considering a higher deductible, and dropping unnecessary coverage.
FAQs
Q: How much does insurance go up with a new car?
A: On average, insurance premiums can increase by around 10% to 20% when you buy a new car. However, this can vary depending on several factors, including the make and model of the car, the age of the driver, the driving record, and the location.
Q: Why do insurance premiums go up with a new car?
A: Insurance premiums go up with a new car because the car is more valuable and more likely to be stolen or involved in an accident. Insurance companies also consider the make and model of the car, as well as the age of the driver and the driving record, when determining insurance premiums. (See Also: What Is the Minimum Coverage for Car Insurance in Texas? A Guide to Compliance)
Q: Can I minimize the impact of a new car on my insurance premiums?
A: Yes, you can minimize the impact of a new car on your insurance premiums by shopping around for insurance quotes, considering a higher deductible, and dropping unnecessary coverage. You can also consider purchasing a car with a lower insurance premium, such as a used car or a car with a lower value.
Q: How do I get the best insurance rate for my new car?
A: To get the best insurance rate for your new car, you should shop around for insurance quotes, consider a higher deductible, and drop unnecessary coverage. You should also consider purchasing a car with a lower insurance premium, such as a used car or a car with a lower value. Additionally, you should maintain a good driving record and keep your credit score in good standing, as these can also impact your insurance premiums.
Q: Can I cancel my insurance policy if I decide to sell my new car?
A: Yes, you can cancel your insurance policy if you decide to sell your new car. However, you should check your policy to see if there are any penalties or fees for canceling early. You should also consider purchasing a new insurance policy for your new car, as the insurance premiums may be different.