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By: Daniel Robinson, By: Daniel Robinson Writer Daniel is a writer for the Guides team and has written for numerous automotive news sites and marketing firms in the US, UK and Australia specializing in car finance and car care topics. Daniel car insurance, loans, warranty options, car services and more. is an authorized representative of the Guides team.
Cheap Car Insurance For New Cars
Editor: Rashawn Mitchner Editor: Rashawn Mitchner Managing Editor Rashawn Mitchner is an editor on the Guides team with over 10 years of experience covering personal finance and insurance topics.
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If you want extra peace of mind after driving a new car, new car replacement insurance may be just the ticket. If your new car expires shortly after purchase, this type of policy will help you recover the full value rather than the depreciated value that the insurance provider would normally offer. Adding this extra coverage can help you enjoy your new car with less stress.
In this article, we’ll explore new car replacement insurance at Guide Group and some of the best providers that offer it. We’ve ranked the best car insurance companies to give you a big picture of your car insurance options.
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The Guide Group is committed to providing reliable information to help you make the best possible decision about your car insurance. Because consumers trust us to provide objective and accurate information, we’ve created a comprehensive rating system to form our rankings of the best car insurance companies. We’ve collected data on dozens of auto insurance providers to rate companies on a wide range of ranking factors. After 800 hours of research, the final result was an overall rating for each provider, with the top-scoring insurers at the top of the list.
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In order to purchase new car replacement insurance, providers will usually require you to have both collision and comprehensive coverage. Many states require you to carry liability insurance that covers other drivers, passengers and vehicles only in accidents you cause.
Collision insurance protects your car regardless of who is at fault, while comprehensive insurance protects your car against theft, vandalism and environmental damage such as falling tree limbs and flooding.
New car replacement insurance is useful if you get into an accident right after buying a new car. For example, if you buy a new car for $35,000 and a few months later you are involved in an accident covered by your insurance, standard insurance may value the car at about $30,000.
With new car trade-in insurance, you are paid the equivalent of the purchase price of a new car of the same make and model minus the deductible. In other words, you don’t have to worry about getting reimbursed for the depreciated value or actual cash value of your car. You can exchange your total car for a new one.
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Both gap insurance and new car replacement insurance help cover the difference between the original value of your car and its value at the time of a covered loss. What differentiates these insurance products is that gap insurance does not cover the replacement value of a new car. It simply covers the gap between the claim payment and what is left on the car loan or lease.
Before considering the cost of a new car replacement insurance policy, it’s a good idea to understand how much a comprehensive insurance policy typically costs. The national average cost of comprehensive coverage is $1,730 per year, or $144 per month.
Auto insurance providers typically don’t advertise the cost of a new car replacement policy, but most estimate that this optional coverage adds about five percent to the total coverage. If you pay about $200 a month for your auto insurance, it will cost you about $10 a month to add new car replacement coverage. As always, the best way to get an accurate quote is to compare car insurance rates from multiple providers.
To get an idea of what you might pay, average annual rates from several top nationwide providers can be found in the table below. These rates are for a full coverage policy for 35-year-old drivers with good credit and a clean driving record. Your rates will vary based on a number of individual factors.
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New car replacement insurance is relatively inexpensive and can bring peace of mind when driving a brand new car. Knowing you’re covering the full original cost of your car is probably worth the extra cost. Depending on what terms are available from your insurance provider, you may only be able to keep a new car replacement insurance policy for a year or two. This means it’s not a long-term investment, but it can be an invaluable investment if your car is declared a total loss.
Not all major auto insurance companies offer new car replacement policies. Some put the car on insurance to cover the difference between the car’s value and what’s left on the loan. If you are interested in a new car replacement policy, we recommend the following reputable insurance providers:
Erie Insurance is known for having low rates and a wide variety of discounts. The company’s Erie Auto Plus option has unique benefits such as a $10,000 death benefit, a lower deductible and higher limits for certain coverages.
Erie Insurance’s auto replacement policy is called Auto Security. Basic Auto Safety rules that apply to both new and used vehicles include:
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Liberty Mutual offers a variety of supplemental policies, one of which is new car replacement insurance. If your vehicle is stolen or stolen within the first year of ownership or within 15,000 miles, the company will pay the cost of a replacement vehicle of the same make and model. For vehicles older than a year, Liberty Mutual offers Better Car Replacement coverage. This covers the cost of a vehicle that is a year newer and has 15,000 miles less than your total vehicle.
Farmers Insurance has a reputation for reliable service and offers a wide selection of additional coverage options. Its new car trade-in insurance pays to replace a totaled car with a new one of the same make and model. This benefit is available when your vehicle is in its first two model years and has covered 24,000 miles.
In addition to quality coverage, Allstate offers a Claims Satisfaction Guarantee. This ensures policyholders are satisfied with claims services through the company and underscores Allstates’ commitment to its customers.
While the insurer has slightly higher average rates, it offers plenty of savings opportunities and two different usage-based programs to earn discounts. When it comes to new car trade-in insurance, Allstate offers coverage for used cars two years and newer that covers the price of a new car of the same make and model.
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New car replacement insurance is worth the extra cost if you want to make sure your new investment is protected. Not all insurers offer this type of coverage, but you can check with your insurance agent to make sure a potential provider offers new car replacement coverage when applying for quotes. Our team recommends comparing car insurance quotes from multiple providers to find the best deal for your situation.
Gap insurance covers the difference between your loan or lease liability and the claim payment for the total value of the vehicle. New car trade-in coverage pays to replace a totaled car with a new car of the same make and model.
No, Progressive does not offer new car trade-in insurance. The company offers loan/rental coverage similar to gap coverage. The main difference is that the loan/lease payment cannot exceed approximately 25% of the value of your vehicle (the exact limit varies by state).
Because consumers trust us to provide objective and accurate information, we’ve created a comprehensive rating system to form our rankings of the best car insurance companies. We’ve collected data on dozens of auto insurance providers to rate companies on a wide range of ranking factors. The result was an overall rating for each provider, and the insurers with the highest scores topped the list. Partner Content: This content was created by a business partner of Dow Jones and was researched and written independently of the newsroom. Links in this article may earn us a commission. More details
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Our team found that car insurance in Illinois costs $281 per year for minimum liability coverage and $792 per year for full coverage.
By: Daniel Robinson, By: Daniel Robinson Writer Daniel is a writer for the Guides team and has written for numerous automotive news sites.
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