This post contributed by Answer Financial, sister company to Esurance.
Shopping for a car, whether it’s brand new or used, can be an exciting experience. Some people know the exact car they want before they shop while others prefer to explore their options by researching cars online or visiting a dealership. Although you may have a ballpark price in mind, you might discover you’re willing to pay a little more after going on a few test drives. Whichever car you finally decide on, you’ll want to make sure you have the right amount of insurance to protect you and your new (or new-to-you) vehicle.
It’s important to keep in mind that expensive cars are also expensive to insure, so it’s wise to get a couple of insurance quotes before you go car shopping. That way, you’ll be able to see if your future car payment, combined with the estimated insurance premium, will fit your monthly budget. Remember to factor in all of your other car-related expenses too, like gas and maintenance, when calculating your monthly bills.
As a general rule, it’s better to buy a less expensive car you can afford to adequately insure than to buy a higher-end vehicle with a bare-bones insurance policy. Here are some helpful tips to consider when buying your car.
Tips for first-time car buyers
For new drivers planning to purchase their first car, it’s wise to establish your insurance needs before you head to the dealership. If you’re adding a new car to your parents’ existing policy, for example, most carriers will require you to report that information no later than 30 days after your purchase. If you plan on financing your car, you’ll need to show proof of insurance before driving off the lot to satisfy your lender’s requirements.
New cars vs. used cars
Take some time to weigh the pros and cons when deciding between a new or used car. New cars typically require very little maintenance, while used cars may need some extra attention and care. On the other hand, new cars can quickly depreciate in value and can be more expensive to insure than used cars. Depending on your lifestyle and transportation needs, you’ll need to see if the extra money for a new car will be worth it for you in the long run.
Old or rarely-driven cars
Dealerships are notorious for low-balling customers who trade in their old car as a down payment for a newer vehicle. For some people, it might make more sense to keep an older car that someone like a babysitter or an out-of-town guest may occasionally drive. The good news is there are a lot of inexpensive and usage-based insurance plans for cars that are seldom driven. If you believe your vehicle may qualify for a low-mileage plan, it’s a good idea to call a licensed insurance expert and compare your options to make sure you’re paying the right rate for your insurance.
Whatever your situation may be, remember that the least expensive insurance option may not always be the right plan for you. For more great insurance tips, check out Answer Financial’s Insurance Center blog or visit AnswerFinancial.com to compare quotes on your policy.
Please note: The information provided above is general and does not necessarily reflect the policies of Esurance or the discounts available through Esurance. Esurance discount amounts may vary and coverage and discounts are not available in all states.