Car Insurance Buyer’s Guide

Compare Auto Insurance Rates

Most car buyers end up shopping for car insurance after they’ve already bought a car. This is one of the biggest mistakes car buyers make and end up costing them more money than they budgeted up front. Once you have a general idea of the car you would like to buy, you should then shop for insurance rates.

The law requires full coverage car insurance if you’re financing a new or used car through a bank, lender, or finance institution. If you don’t check first, you could end up paying a higher monthly payment for insurance then you’re actually paying for your vehicle.

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Benefits of shopping car insurance online

Depending on your past driving record and the car you’re wanting to buy, the short answer is, “car insurance can be very expensive,” especially when it comes to buying a brand new car.

The internet makes it easy for you to comparison shop car insurance rates so you can choose the absolute best coverage for you and receive it at the lowest possible price available.

Benefits of shopping auto insurance coverge online:

Budget – Auto insurance is part of your monthly car ownership cost. Knowing how much your insurance coverage will cost you before buying a car will help you budget the amount in with your monthly car loan payment. Depending on where you live, the vehicle and your current driving record. Your insurance costs could be $1,500 or more a year. That’s $125 on top of your monthly car payment. If you let a car dealer close you on the higher side of your payment budget, this extra $125 is going to push you over the top.
Low pressure – not having to deal with pushy or overly aggressive agents just looking to make a sale. Car insurance agents, like any salesperson, may tend to lean you, or direct you in a certain direction. This direction may not be the right direction for you.
Free price quotes – Online insurance companies provide you with free, no-obligation price quotes. This allows you to research, price, compare and choose a policy without ever being hassled or pressured into buying anything from anyone.
Convenience – some of us do our best online shopping from home in our underwear at 2 a.m. in the morning.
Same coverage – a common misconception is that online insurance companies provide less reliable coverage as brick-and-mortar companies. This is not true, same company = same reliable coverage. No matter whom the coverage is through, we always recommend reading the fine print on any auto insurance policy.
Comparison shopping – Shopping several companies and being able to compare them side by side to see which insurance coverage is the best value for your money.
Discounts – The same insurance discounts available online as the discounts available in brick-and-mortar offices.
Customize – If you’re like me you like to run through multiple scenarios, explore all your options or like to change your mind at the last minute. Online insurance shoppers don’t have to worry about spending hours in an agent’s office running through different scenarios looking for the best deal. Online customization features allow consumers to create different scenarios to choose which insurance coverage is best for them.
Savings – Last, but certainly not the least, the best reason to shop for car insurance online is the price. The insurance company online doesn’t have to staff offices, pay insurance agents or utilities. These online companies will then pass these savings on to the consumer; this makes them often cheaper than their competition.

How to buy a new car under factory invoice price and get a great deal.

Must-Read Guides and Resources

How to Buy a New Car Below Factory Invoice Price – True dealer cost and the factory invoice price are not the same… dealer cost can be much lower.
Best Car Shopping Sites With Free Quotes – How to take advantage of online car-buying sites.
How to Buy a New Car Online – Not sure where to start? My step-by-step guide on how to buy a new car online.

If you don’t have insurance coverage or let it lapse

You don’t want to be caught driving without auto insurance, it is illegal and most states have very hefty penalties. Many insurance companies will not provide you with insurance coverage if you’re not currently insured.

Be cautious of fly-by-night companies offering cheap policies from unrated insurance carriers. These companies may not be in business if you ever need to file a claim. It’s well worth paying a little more to go with a well known carrier and the peace of mind if something ever happens you’ll be covered.

There are only a few well-known companies that will provide you with a free, no-obligation rate quote and consider providing you insurance coverage if you’re not currently insured.

Car Price Quotes

Car prices are HIGH! You can still get a great deal by comparing prices using an online shopping service.

Rydeshopper
Edmunds
MotorTrend

Find the dealer with the lowest price and save. It's Fast, Easy, and FREE!

Does credit history affect auto insurance rates?

Not only does your credit history affect the interest rate you will pay for a car loan, it will affect the price you pay for auto insurance also.

Everyday more and more car insurance companies are taking into consideration your personal credit history and score when you purchase, renew or change your auto insurance policy. Insurance companies have found a direct correlation to people with bad credit tend to also carry a higher insurance risk by filing more claims on their insurance policies.

This can also be a very good reason to shop car insurance rates to find a better deal. If you have some bumps in your credit history when you last purchased car insurance and your credit history has since improved, it’s time to explore your options. An insurance company is not going to call and offer you a discount once your credit history improves. Knowing and maintaining what’s on your credit reports is a positive thing and will help you throughout your life.

Step-by-step walkthrough on how to buy a new car | New Car Buying Cheat Sheet

Use a trusted online insurance company for free quotes.

The companies I recommend are leaders in the industry. They’ll provide you with free quotes so you can review and compare prices and make a good buying decision.

Make sure you provide them with accurate information and you will want to enter the same information to each separate company. The goal is to get price quotes from each company on the same type of coverage. You also want to be honest, don’t think you can “forget” about a speeding ticket you received a few months ago. They will find out and possibly raise your rate or cancel you altogether once you’ve already been approved.

Additional car insurance shopping tips

Check insurance rates before buying a new or used car, not after you’ve already committed to the vehicle.
Shop for coverage frequently or whenever your personal circumstances change. Let’s say, you need to insure a teen, get married, reduce you travel commute, or add another vehicle to your policy.
Insurance premiums will vary greatly by make and model of a vehicle, choose wisely.
Both you credit rating and driving record have an impact on the price you’ll pay for car insurance. For the best premiums, you will need to have at least three years of clean driving history.
Ask the insurance agent which driver to be assigned as the principle drive to which vehicle in your household. Matching those individuals’ driving records and car values might save you money. Pairing a lower-value car with the driver who commutes the longest distances, for instance, may cost less than giving that driver the higher-value car. You may find that matching a teenager to the oldest car in the household will save you money.

See what your vehicle is worth before contacting a car dealership.