Before you commit yourself to buying any particular make and model, you should carefully research which makes and models have the lowest insurance rates.
This is true whether you are looking to buy a new model straight from the manufacturer or buying something new to you from a secondhand showroom. However, before we get into the detail, there’s an underlying issue. If you have enough cash to buy the vehicle outright, you are free to make whatever decisions you like on cheap auto insurance . But if you need an auto loan, you are bound by some quite tough contractual terms on insurance. When a bank or finance company lends you money, it wants security so that, if your pride and joy is unexpectedly reduced to burning wreckage, there’s enough cash coming in from the insurer to pay off most of the loan. Read the small print on exactly what level of cover you will be required to buy. It should be obvious this will involve both collision and comprehensive cover but you need to look at the minimum values of the cover.
Most policies pay out fair market value if the vehicle is totaled. This is the estimated cost of replacing your vehicle on the secondhand market. Now think about the loan. When you take it out, interest and administrative fees and charges are added to the total payable. Immediately you drive the new vehicle away you lose the sales tax from the replacement value. Depreciation is also highest in the first year of ownership. So the fair value amount you are likely to receive often leaves quite a big gap. You need additional insurance to guarantee you have enough money to pay off your auto loan.
Before you buy a new vehicle, research which makes and models have 5 star ratings from the NHTSA.
These are considered the safest vehicles and bring in auto insurance quotes at the lower end. If you buy something high-powered with poor anti-theft security, there will be no cheap auto insurance. Everything will cost more than you expect. It’s exactly the same when you are buying secondhand. You should still check the historical records of the NHTSA to find out which makes and models have the highest safest ratings. Only when you have the list of safe vehicles in your price range is it safe to go out and start shopping to buy. That way, when you buy a vehicle from the list, you know you can afford to pay when the auto insurance quotes come in. In all this, remember that buying cheap auto insurance, particularly for a new vehicle, is often a false economy When you have invested so much money, it’s foolish to sacrifice a few dollars to get the coverage to protect yourself. Always get multiple auto insurance quotes from all the leading insurers to find affordable coverage. Only then can you sleep peacefully.