How do I Add a New Car to an Insurance Policy?

by Amber Keefer, Demand Media
    Make sure your new car is insured before signing on the dotted line.

    Make sure your new car is insured before signing on the dotted line.

    Insurance companies differ in how they handle automobile insurance transfers. That’s why you should get the facts about insuring a new car before finalizing the purchase. Not all insurance companies automatically insure a new vehicle even if you already have a policy with that company. Then, too, it’s never a good idea to drive a car off the dealership lot without first getting a quote on the new rate. Worse, you don’t want to drive away only to find out that your new car isn’t covered under your current policy.

    Step 1

    Choose whether you will be trading in your old car or selling it once you purchase a new model. If you decide to keep your old car, you can either add the new car to your current auto insurance policy or shop for another insurer. Whatever you decide, make certain that your new car is covered before driving it off the lot.

    Step 2

    Copy down pertinent information about the car you are interested in purchasing. You will need to provide the make, model, year and purchase price when you go to insure the vehicle. Write down the VIN number for the car as well. Make a note of any safety and antitheft features that are included with the car as these can save you money on insurance.

    Step 3

    Contact your insurance company to request an insurance quote for the vehicle you want to buy. Tell your insurance agent whether you will be adding the new car to your policy or if the new car will replace your current vehicle. Remember that you will be paying a higher premium for a newer model car. Shop around and compare quotes from more than one company to find the best rates. You can get quotes from dozens of companies by going online.

    Step 4

    Review auto insurance rates if you are thinking about keeping your old car. If you just want to have it as a backup vehicle, consider the cost of insuring both your new and old cars. You might find that the additional cost for insurance is not worth keeping your old car.

    Step 5

    Update your policy when you buy a new car. If you are replacing your old car with a new car, you may have a grace period in which you can call your insurance company. Most companies give you 14 to 30 days to call them with the details about a new car. Call your current insurance agent to find out if you are required to insure your new vehicle before driving it off the dealer’s lot, especially if you add it onto your current policy as an additional vehicle.

    Step 6

    Select your coverage amounts and deductibles when insuring the car. You might want to insure your new car for different amounts than other cars you have insured. Kim Lankford, author of “The Insurance Maze: How You Can Save Money on Insurance – and Still Get the Coverage You Need,” suggests cutting the cost of your policy by raising your deductible. Paying for small claims out-of-pocket is less likely to put your insurability at risk.

    Step 7

    Ask your insurance agent for a multicar discount if the same company insures other cars in your household. You may also qualify for a discount if you purchase other types of insurance from the company. Multipolicy discounts can save you money on the cost of auto insurance.

    About the Author

    Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.

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