How Buying a New Car Affects Your Insurance Rates

July 3rd, 2014 by

CAM_MY15_0002_V001Before buying a new car, most people go over their budget to determine how much they’re willing to pay for the monthly payments. They’ll also figure out what they’re comfortable with using as a down payment but many people often forget about their insurance premiums. When you buy a new car, you need to consider how it’s going to affect your insurance rates, especially if you plan to buy a sports or luxury vehicle.

Insurance rates are very unpredictable, so it’s difficult to know how much it will go up when you add your new car onto the policy. You will have to carry full coverage on any vehicle you finance until it’s paid off. This will make your premium go up considerably, especially if you only carry liability on your current vehicle.

Even if you already have full coverage on the vehicle you’re trading in for a new one, your premium will probably not stay the same. Many things influence insurance rates that you may not even think of when buying a new car.

What Influences Insurance Rates

Knowing some of the things that influence insurance rates will help you keep costs down when buying a new car. Some of things that will affect your premium that you don’t have any control over are your age, gender and in most cases your location because moving may not be an option for you.

Below are a few of the things you can control that will affect your insurance premiums:

  • It doesn’t matter if you’re driving a sports car or a family car, the more the vehicle cost the more you’ll pay for insurance. This is because it will cost the insurance company more to pay it off or replace it in the event of an accident, so choose wisely.
  • If the genuine Toyota parts needed to repair the vehicle are expensive, then the rates will be higher because it would cost more to fix it so do your research before you buy.
  • Each company has their own rates and some can offer lower premiums than others can, so what you pay depends on which insurance company you use, which is why you need to shop around.
  • The more tickets and points you have on your license, the more it’ll cost you for insurance.
  • Choosing a vehicle that thieves target the most will raise your rates.

Thieves used to target mostly sports cars but that’s not always the case anymore. Did you know that the Honda Accord has been targeted the most over the last several years, followed by Toyota Corolla and the Camry? SUVs are also popular among thieves but manufacturers are doing more to protect car buyers by adding new security devices to help deter thieves.

Tips for Lowering Your Insurance Rates

The best way to lower your insurance rates when buying a new car is to look for discounts. Most insurance companies will offer discounts for vehicles that have added safety features and anti-thief features. You may also be able to get a discount is you have an excellent driving record or if you don’t spend a lot of time on the road.

Another way to lower your insurance premiums is to increase your deductibles. For example, if you pay $100 now, you can raise it to $500 or even $1,000 deductible. When you raise your deductibles, it helps to lower your monthly premiums.

The main thing is to check with your insurance company before you buy a new car to see how it will affect your rates. Get quotes to help you determine if the car of your dreams is affordable when you add your insurance premiums into the budget or if you need to look around a little more.

Posted in Car Buying