Insurance for New Cars: What You Need to Know

Insurance for a new car costs $254 per month, on average. You’ll need to have a policy in place before you drive your new car home.

Jacqueline DeMarco
Jacqueline DeMarco
  • 13+ years writing insurance and personal finance content

  • Insurance, lending, and retirement expert

Jacqueline has contributed content, and her personal finance passion, to dozens of noteworthy financial brands, including Credit Karma, Bankrate, and MagnifyMoney.

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Ashley Cox
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Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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Konstantin Halachev
Data reviewed byKonstantin Halachev
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Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Updated April 18, 2024

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Cheapest recent rates

Drivers using Insurify have found quotes as cheap as $35/mo for liability only and $40/mo for full coverage.

*Quotes generated for Insurify users within the last 10 days. Last updated on April 18, 2024

Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from April 18, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

*Quotes generated for Insurify users within the last 10 days. Last updated on April 18, 2024

Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from April 18, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

When you buy a new car, you’ll need to have proof of insurance if you want to drive it off the lot. On average, full-coverage insurance for new cars (2023 and 2024 model years) costs $254 per month, according to Insurify data. 

How much you spend on auto insurance depends on many different factors, such as your driving record, age, the type of vehicle you own, your coverage choices, and your location.

Here’s what you should know about buying auto insurance for a new car, including the importance of comparing rates to make sure you’re getting the best deal on coverage.

Quick Facts
  • The average monthly full-coverage insurance rate for a 12-year-old vehicle is $189.

  • The national average cost of full-coverage car insurance is $213 per month, which is much less than the cost to insure a new car.

  • The Honda CR-V is the cheapest new vehicle to insure, with a monthly full-coverage average of $215.

When to buy insurance for your new car

You can’t drive a car legally without having an active car insurance policy that meets the state’s minimum liability coverage requirements or financial responsibility laws.[1]

When you buy a new car, you’ll need to have a car insurance policy in place if you want to drive it off the lot. If a police officer pulled you over on the way home, you’d need to have proof of auto insurance — even if the car has only belonged to you for a few minutes.

If you already have car insurance

If you already have a car insurance policy in place for your old car, contact your insurance agent and give them your new vehicle information so they can make the necessary changes to your policy.

Many insurance companies offer a grace period between when you buy a new car and when you need to update your policy, and your insurer should be able to give you a time frame when you call.

If you don’t have car insurance or are switching companies

If you don’t have an existing car insurance policy or are planning to switch companies, you’ll need to sign up for a policy right away so that you can drive your car legally from day one.

You can contact different insurance companies by phone, go to their websites to get quotes, or use an online quote-comparison tool to compare rates from multiple companies in one place. This often only takes a few minutes.

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How a new-car grace period works

A new-car insurance grace period gives drivers a temporary extension of coverage to newly purchased vehicles under an existing auto insurance policy. This grace period typically lasts between seven and 30 days and gives you time to update your policy.

Having that leeway can be helpful since you likely won’t have the information for the exact car you want until you buy it. For example, your premium prices may be lower if you opt for a model with special safety features, and you may not make that decision until the day you buy the car.

How much new-car insurance costs

How much you’ll spend on new-car insurance depends on a wide variety of factors, but a full-coverage policy for new car models from 2023 and 2024 costs $254 per month on average, according to Insurify data.

A major influencing factor when it comes to car insurance rates is the type of car you buy.[2] How much it costs to repair or replace the car, the likelihood of theft, the safety record, and even the size of the engine can play a part in pricing.

For example, the Ram Pickup comes with a much higher average monthly premium ($275) than the Nissan Rogue ($224). Check out other prices for new-car insurance in the table below.

Vehicle Make/ModelAverage Quote: Full Coverage
Honda CR-V$215
Nissan Rogue$224
Toyota RAV4$232
GMC Sierra$237
Toyota Tacoma$240
Jeep Grand Cherokee$248
Ford F-Series$249
Chevy Silverado$256
Tesla Model Y$274
Ram Pickup$275
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.

How to get new-car insurance

If you don’t already have car insurance or you’ve decided to switch insurers when you buy a new car, it can feel a bit overwhelming to start your hunt for the right coverage.

Follow these steps to find auto insurance coverage that works for you.

1. Determine how much coverage you need

Think carefully about how much car insurance coverage you need. You’ll have to meet the state’s minimum liability requirements, but you may want more coverage, like collision insurance, for added peace of mind.

Keep in Mind

If you’re financing or leasing a car, your lender will probably require you to purchase full-coverage insurance. You can work with an independent insurance agent to determine the type and amount of car insurance coverage you need.

2. Compare car insurance quotes

After determining how much coverage you need, request quotes from at least three different insurance companies to see which insurer can offer you the right type and amount of coverage for the best price.

The goal isn’t just to find the cheapest policy — it’s to secure the best coverage for an affordable price that meets your needs.

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3. Look for discounts

It never hurts to ask about what discounts you may qualify for before purchasing a policy to get your premium price as low as possible.[3] All insurers offer different types of discounts, but some popular ones include:

  • Multi-policy discount: If you bundle auto insurance with other policies from the same company, such as home or renters insurance, you can often save on both policy types.

  • Good driver discount: Drivers with a clean record free of accidents, DUIs, or speeding tickets can save since they pose less of a risk to insurers.

  • Safe-vehicle discount: If you equipped your car with advanced safety features or bought a new car that has great safety ratings, you may be able to score a discount.

  • Student discount: If you’re a student driver or pay for your child’s car insurance, look for student-based savings for things like having good grades or taking a defensive driving course.

Learn More: Guide to Car Insurance Discounts

Learn More: Guide to Car Insurance Discounts

4. Take out a new insurance policy and provide proof of insurance

Once you’ve selected an insurance company, you can purchase your new policy. That way, if you’re financing or leasing your new car, you can provide the necessary proof of insurance before driving home. Make sure your new policy goes into effect before you cancel your old one so that you can avoid a lapse in coverage.

Your new insurance company should mail you your ID cards, but many insurers also have an app where you can download them digitally on your smartphone.

5. Cancel your old policy

Contact your previous insurance company to cancel your old auto insurance policy. If you cancel your policy mid-term but paid your premiums up front, you may be eligible for a refund.

Make sure your new policy is in effect before you cancel your old one.

Factors that affect new-car insurance rates

Whether you’re buying a new or used vehicle, several factors affect the price you’ll pay for insurance coverage:

  • Driving record: Insurance companies assess your history of accidents, violations, and claims to determine risk and how much to charge you. Try to keep your driving history as clean as possible.

  • Vehicle type: The make, model, and year of your car influence rates based on repair costs, safety features, and theft likelihood.

  • Coverage and deductibles: The level of coverage you choose and your deductible affect premiums, with more robust coverage and lower deductibles resulting in pricier premiums.

  • Location: Where you live, down to your ZIP code, affects auto insurance rates due to factors like traffic density, crime rates, and weather conditions.

  • Annual mileage: The more you drive, the more you increase your chances of getting in a car accident, which can increase car insurance rates.

New-car insurance FAQs

For more insight into what you need to know about buying insurance for a new car, check out the additional information below.

  • When does a new-car insurance policy start?

    A new-car insurance policy can start as soon as you make your first premium payment. You can confirm the exact start date of your policy with the insurance agent you work with, but you can generally get coverage quickly.

  • Is a new car more expensive to insure?

    Yes. New cars are more expensive to insure than old cars because they have higher replacement costs, more advanced technology, and increased susceptibility to theft or damage.

  • Do you need auto insurance before purchasing a car, or can you get auto insurance the next day?

    If you want to drive your new car home, you need to have auto insurance the day you purchase it. The dealership may even require you to provide proof of insurance before driving the car off the lot.

  • If you just bought a new vehicle in the state of Florida, can you drive it without tags with proof of insurance and the bill of sale?

    In the state of Florida, you’ll need a temporary license plate to drive the car legally until you receive the official license plate. Depending on the circumstances of how you bought the car, you can use a temporary license plate for a period of 10, 30, or 90 days.[4]

Methodology

Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.

Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).

Liability-only premium averages correspond to policies with the following coverage limits:

  • Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
  • Property damage limits between $10,000 and $50,000
  • No additional coverage
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • Comprehensive coverage with a $1,000 deductible
  • Collision coverage with a $1,000 deductible

Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.

Sources

  1. Insurance Information Institute. "Is it legal to drive without insurance?."
  2. Insurance Information Institute. "What determines the price of an auto insurance policy?."
  3. Insurance Information Institute. "Nine ways to lower your auto insurance costs."
  4. Florida Department of Highway Safety and Motor Vehicles. "License Plates & Registration."
Jacqueline DeMarco
Jacqueline DeMarco

During college, Jacqueline DeMarco interned at a retirement plan advisory firm and was tasked with creating a presentation on the importance of financial wellness. During her research into how money can affect our health, relationships and career, Jacqueline realized just how important financial education is. Jacqueline is a contributor for Insurify and has worked with more than a dozen financial brands, including LendingTree, Capital One, Credit Karma, Fundera, Chime, Bankrate, Student Loan Hero, ValuePenguin, SoFi, and Northwestern Mutual, providing thoughtful content to give readers insight into complex topics that they likely didn’t learn in school.

Ashley Cox
Edited byAshley CoxSenior Managing Editor
Headshot of Managing Editor Ashley Cox
Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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Konstantin Halachev
Data reviewed byKonstantin HalachevVice President of Engineering
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

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