Buying A New Car? Remember To Check Its Insurance Rates First

Automobiles are generally the second largest purchase (next to a house) that a person makes, and there are many factors that you as a consumer should consider when making a decision. Before you become distracted by the myriad of incentives, rebates, extended warranties and convoluted financing terms, do not overlook the cost of insuring the vehicle that you are considering. Insurance rates differ greatly between cars. If the car is safe and performs well in crash tests, is not frequently stolen, and/or has certain safety or anti-theft features, it will generally cost less to insure. If on the other hand the car is flashier, has a history of being frequently stolen, or is more expensive to repair, you can bet your insurance rates will be higher.

Many people overbuy on cars, leaving them straining to make ends meet and forcing them to severely alter their current lifestyle. It is always a good idea to prepare a budget before you even begin looking for a new car. Figure out how much you can afford, and keep in mind that just because you get approved for a certain loan amount does not necessarily mean you can realistically afford the monthly payment. In your budget, include the cost of gas, vehicle maintenance, and of course, the cost of insurance. Determining the ideal monthly payment without recognizing the corresponding cost of insurance is a mistake that could deliver a rude financial awakening coupled with an unpleasant feeling of buyers’ remorse.

It is recommended that you purchase a car using the sound shopping principles of research, comparison, and preparation. Print out any research, including price quotes and trade-in values, and carry it with you when you begin test driving cars. Use the Internet to find multiple sources for shopping, financing, and insuring the various vehicles that you are interested in, and use the following tips to help you in your car buying process:

1. Determine how much you realistically can spend on a car (factoring in the loan payment, insurance, gas, maintenance, etc).

2. Identify which dealers or sellers are offering incentives or rebates.

3. If you are trading in your current vehicle, be sure to check the trade-in value. Remember, there are two different trade-in values: one for selling it to the dealer, and one for selling it privately.

4. Make sure to test drive all the cars you are considering buying. You may be surprised to find you like the way the less expensive (or safer) car drives just as much as the models on your wish list.

5. Shop around and don't impulse-buy. Remain emotionally indifferent and never show the dealer your excitement.

6. Dealerships are not the “end all, be all.” Don’t rely exclusively on them for financing and all other related products and services.

7. Take your time to carefully read all the contractual paperwork during the purchase process. Watch out for all the extra charges the seller might try to build into your contract. If you become confused or overwhelmed, ask for another explanation or give yourself time to discuss with a trusted friend or family member.

8. Although additional safety and anti-theft devices add to the price of vehicle, consider these supplementary devices, as their initial cost may be offset by the savings on your insurance premium.
Ultimately, when you purchase your new vehicle, be sure to shop around for insurance. This is the best way of saving money on insurance. Many people find it easy to stay with the same company for years, but fail to realize they have the potential to save hundreds of dollars each year by comparing quotes from multiple companies. You should shop around at least twice a year to see if you are getting the best deal possible.