Should I Buy Car Insurance Before Buying a Car?

Although limits may change depend on where you live, each state requires you to carry auto insurance to drive legally on the road. But what should you do if you don’t yet have a vehicle? When is the right time to get auto insurance? a close up of a car

In general, you need auto insurance by the time you’re ready to purchase a vehicle. Before you drive off the lot, you need your vehicle to be insured. You can shop for auto insurance before even purchasing a vehicle to get an idea of what type of policy you need and how much you may be paying. Aside from the vehicle itself, your car insurance premiums may vary based on your:

Gender
Driving record
Credit score
Location

You can file for car insurance and provide this information to the provider so that, as soon as you purchase a vehicle, you can activate your car insurance policy. Keep in mind that different aspects of your vehicle will affect your car insurance rates, however, including the vehicle’s:

Replacement value
Age
Safety rating
Speed

Expensive vehicles and those geared for speed not only cost more to purchase, but to insure. This is because car insurance is calculated primarily based on how likely you are to file a claim and how much an insurer may pay. Expensive vehicles cost more to repair and replace, which means your insurer will have to pay more for a claim. Meanwhile fast vehicles are more likely to be involved in an accident.

The age of the vehicle also matters. If you purchase a brand-new car, you may pay more than when purchasing an older vehicle due to its value. However, older vehicles also run the risk of having parts that can be hard or expensive to replace.

Lastly, the safety rating of a vehicle can affect your car insurance rates because it affects the severity of injuries after an accident. Drivers who purchase vehicles with higher safety ratings tend to pay less in auto insurance.

No matter what vehicle you plan to buy, be sure to speak with your insurance agent and remain in contact throughout the process. Keep in mind that it is illegal in most states to drive without auto insurance. While minimum liability is usually required, full coverage auto insurance is generally recommended to cover all of your potential losses, damages and injuries in case of an accident.

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