You did your research, loved the test drive, and feel good about the price tag. But before you drive that shiny new ride off the dealer’s lot, there’s one more price tag to consider.
Your car insurance premium is determined by many factors, and the kind of car you drive is one of them. Some cars, like family minivans, have stellar crash test results and accident histories, which can translate to car insurance savings if you’re swapping a sports car for a new minivan. The opposite is also true: Trading in Old Reliable for Flash Lightning can lead to an increase in your car insurance payments.
With this in mind, we’ll break down 5 key insurance factors to help you make an informed purchase.
1) Check on Safety Ratings
The Insurance Institute for Highway Safety (IIHS) is the leading authority on crash tests and safety ratings.
Visit the IIHS website to find out how your prospective new car fared in a battery of scientific crash tests.
The better your car scores with the IIHS, the happier your insurer will be. And happy insurers reward drivers through lower rates.
2) Your New Car’s Crash History
Believe it or not, insurers track the crash frequency of individual makes and models. Insurers are in the risk prediction business, and this is just another predictor of accident likelihood. Different types of cars and trucks also suffer damage differently: Some cars absorb a surprising amount of damage without requiring repairs, while a fender-bender in another car might require an entirely new front end.
So while you might sport a pristine driving record, your insurance rate might still increase if you buy a make and model with a high accident rate or a low threshold for damage.
3) Your Comprehensive and Collision Coverages
As a quick and slightly oversimplified refresher, comprehensive coverage (sometimes called “other than collision coverage”) can help pay to repair or replace your car after specific types of incidents like theft, vandalism, or single-car accidents. Collision coverage helps pay to repair or replace your car in the event of a (you guessed it) collision with an object or another car.
Because these coverages are specific to the make and model you drive, your new car will determine what you pay to keep them on your policy. If you were driving an old hatchback with an actual cash value of $4,000, your comprehensive and collision premiums were likely affordable because the most your insurer would ever have to pay (to replace the car) would be $4,000, minus your deductible.
Now imagine trading in that $4,000 ride for a car worth $34,000. Your insurance company now needs to consider the possibility that a total loss or theft could lead to a claim for $34,000. What you pay for the coverages might rise accordingly.
Tip #1: Most insurers are more than happy to talk through any of these scenarios before you buy that new car. So if you don’t like surprises, give your company a quick call to see how a change can affect your premium.
4) Damage Potential and Frequency: Liability Premiums
The IIHS also reports on claims frequency and severity by car size and type.
Generally speaking, bigger trucks and SUVs caused more damage than smaller ones, and smaller cars caused more damage than average-sized sedans.
If your new car is one that has a higher-than-normal claim frequency and severity, the cost of your liability coverage might increase.
5) Potential Discounts
If your new ride is chock full of the latest safety equipment, you might score a new discount on your car insurance. Same goes for anti-theft systems.
And if you’re adding a new car as the second car on an existing policy, you could score the frequently offered multi-car discount.
Check with your insurer to see what potential money-savers you could be in line for. If you plan on buying a car with poor safety ratings and a dicey accident history, these discounts could help offset any sudden increase in the cost of your policy.
Read more from; https://www.dmv.org/buying-a-car-and-car-insurance.php
