How Does Insurance Work On A New Car?

Are you planning on getting a new car? Congratulations! Buying a vehicle is a big decision. Did you think about how does insurance work on a new car?

When picking a new car, maybe you have spent quite some time test-driving a lot of cars, comparing prices and guarantees. But, you also need to have in mind your auto insurance. Knowing how does insurance work on a new car will save you lots of money.

Free car insurance quote

Before buying a car | How does insurance work on a new car?

When you buy a new car, how does insurance work? Before buying a new car, it is a good idea to check their insurance rates. As you know, the insurance costs vary base on your make and model.  If you have some options of car models, you can check their insurance rates. 

You will find out that some
models or styles can increase your premiums. Maybe because of their multiple engine or powertrain options. Do not leave comparing quotes out of your to do list.


There are types of car that their insurance will be expensive and sometimes require a special insurance policy. Those can be exotic, vintage or sports cars. The rule is that an expensive car will always have more expensive insure rates. 


When should I buy my new car insurance?

Getting your first new car.
Did you already compare rates and decide which car to choose? Now you have to buy your auto insurance before buying your new car, why? Because the dealer insurance just cover test drives. 

How does insurance work on a new car? Once you buy the car and drive out of the lot, you are responsible for that vehicle. And must have a valid auto insurance.

Replacing your car. If you are replacing your car, your insurance company can give you temporary coverage, usually of 14 to 30 days.

It means they can cover your new car till you add it to your policy.  Still, you have to double-check with your insurance company if it is possible to drive home this way.

Buying another car. Are you adding a new car to your policy? In that case, you need to add this new car to your policy before driving your new car off the lot. 

Do you know the insurance requirements for the car you are buying? There can be different requirements whether your new car  is financed or leased. 

Insurance requirements for new cars

Leased. When leasing a vehicle, the dealership still owns the car. You are basically just paying for the rent charges, taxes, fees and depreciation of the car. You pay to use it, and at the end you can return it or buy it. 

Because you will need to return the vehicle, it must be in a good shape. And it will need both comprehensive and collision insurance coverage. Your leasing company will also require you to have  a certain amount for your deductibles and a high liability coverage.

Financed. If you are financing your vehicle, you will own the vehicle when finish the payments. Your monthly payments can be higher because you are paying for the value of the car.  

You will also need a comprehensive and collision coverage as well. But you can stay with the minimum required by your state of liability coverage and deductibles.

Owned. Are you buying your car by no lender? Then you just need to get an auto liability coverage with your states minimums.  Of course, if you want  to protect your car from damages, you should get full coverage. 

How to buy insurance for a new car

You can get a quote for your new car before purchasing. It is easy and won’t take you much time, you’re just going to need this information:

  • Name and date of birth of the drivers

  • License number 

  • Social security number

  • An Address

  • VIN of your vehicle, you can ask your car dealer this information

In No DMV Lines, we will be happy to assist you and get an affordable insurance for your new car. But whatever you do, never drive without a car insurance. Even if you are just driving your new car home. This can give you problems such as your licenses suspended or pay for damages on your new vehicle. 

Gap insurance | When you buy a new car, how does insurance work?

And last but no least, you should consider a gap insurance. A gap insurance covers the difference between what you owe and your vehicles current worth. You would amaze by how fast cars lose value. 

Imagine you just bought a new car couple months ago, you are still paying that car. If you get into a car accident, more likely your insurance will pay you less than you actually owe. 


You can include a gap insurance to your new car policy to save a thousand of  dollars in case this happens. An insurance agent from No DMV Lines can help you with a free quote. We can get the best rates if you want to apply for this kind of car insurance.