What Kind of Coverage Do You Need Before Buying a Car?

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Even if it’s your first time owning a car, you may already be aware that automobile insurance is absolutely necessary for taking it out on the road. Not only do state laws mandate all vehicles be insured, but for your own safety and peace of mind, a good policy will keep you protected in the event of a totaled car or bodily injury. However, is it necessary to have a pre-existing insurance policy before buying a car? What about if you’re trading in your current vehicle for a new one? Here, we will look at exactly what coverage you need before entering a dealership and signing on the dotted line.

Is a new policy needed?

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When it comes to car insurance, things aren’t necessarily complicated if you’ve done your due diligence. If you’re already an automobile owner and have a standing relationship with an insurance company, you may be wondering if a new policy is needed to match your new car. The good news is that nearly every car insurance company will cover the new purchase for about a week to a month, so you won’t need to make any policy adjustments prior to entering a dealership.

Your best bet, however, is to verify your motorist coverage and decide for yourself if that policy is worth keeping. For example, the new vehicle is more valuable than the older one. In addition, as most policies will cover vehicular damage or a total loss for the approximate cash value, the new car may not be covered by the pre-existing policy. If that’s the case, get an auto insurance quote for the new vehicle as soon as possible.

What’s required for a brand new vehicle?

The rule of thumb is to purchase your auto insurance coverage before you get the car. If you haven’t prepared a policy to show the dealership, you may be in for an embarrassing scenario — you can buy the car without insurance, but they won’t let you drive it off the lot! Believe it or not, because an uninsured driver can’t knowingly take off in their shiny new vehicle acquisition, regardless of their driving record, that purchase has to sit on the lot until you return with the minimum coverage required by the state.

Don’t fret, however, as depending upon your driving and credit history, the dealership may help you find the needed comprehensive insurance right at the signing, allowing you to see first-hand how much coverage is required and the average rates. At the very least, they can assist you in getting a workable car insurance quote in order to finalize the sale. But again, it’s best to walk in already prepared.

What’s required for a trade-in?

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If you’re trading in your current car for a discount on a new one, there’s little background research you have a need to conduct. It’s not a bad idea to contact your insurance company and discuss coverage options, maybe even asking for a free quote on the average rates for the cars you may be considering. Although your existing insurance policy should be applicable to the new vehicle for about 30 days, keep in mind that such a transfer of policies is only temporary. After it expires, you’re still on the hook to get a new policy for the new car.

The good news here is that if you’ve been with your insurance company for a while, you may be in-line for a discount or additional warranty offers when it comes to itemized essentials. For example, a new vehicle may have a higher deductible, but a long-standing relationship with your insurance provider may earn you some lower rates on liability coverage. You may also be able to afford such helpful bonuses as vandalism coverage, natural disaster coverage, or even travel and out-of-state coverage. When it comes to your insurance policy, it’s always worth it to ask!

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