Buying a new auction vehicle can be exciting. However, it’s easy to get lost in the heat of auction bidding and forget a few small items, such as insurance.
Remember, you won’t be able to enjoy your new car until it’s covered by your insurer. It’s essential to understand the different factors at play so you can avoid any issues that may prevent you from driving home your prize. Here are some tips to help you find the right car insurance when purchasing a new auction vehicle.
1. Estimate the Cost
Car insurance rates vary depending on the type of vehicle being covered. Make sure you can afford to insure the vehicle you’re bidding on. Finding out how much the car insurance will be on a vehicle helps you get a better idea of the overall cost you’ll be paying at auction.
Since all drivers are required to carry liability insurance by law, it’s important to evaluate your liability coverage. It protects you and pays medical bills and other damages in the event you cause a car accident that injures other people.
You might also want to add other coverages to protect your assets. When weighing between different coverage choices, you should think about the value of your car. Consider whether adding these options to your plan is a worthwhile investment:
- Collision coverage pays for damages to your vehicle. Usually, this insurance is required if you have a car loan. There is also a deductible – the amount of money you have to pay out of pocket. Your insurer pays the remainder of any repairs costs once you have paid your deductible. Keep in mind that adding collision coverage to your car insurance policy will increase the cost of your monthly premium. 3 major factors affecting the price of your collision coverage are the value of your vehicle, your driving history, and the amount of your deductible.
- Comprehensive coverage pays for damages to your car that aren’t caused by a collision, such as natural disasters, animals, civil disturbance, fire, theft, falling objects, and vandalism. This type of insurance is often required when you lease a vehicle. However, if you have paid off your car, comprehensive coverage is optional. Similar to collision coverage, there is usually a deductible.
- Medical payments coverage pays your medical bills and those of your passengers after a car accident, regardless of who causes the crash. Depending on your state, you might be required to buy this insurance. It’s also known as Med-Pay, or Personal Injury Protection (PIP). Generally, medical payments coverage is one of the least expensive types of coverage options.
When it comes to car insurance, it’s also a good idea to research other variables that may increase your premium rates. One of the most common factors that can significantly affect your insurance costs is owning a salvage title vehicle. Always check the vehicle history report to see if it has been involved in a serious accident or had any substantial modifications or repairs. At the same time, cars at a higher risk of being stolen may result in higher rates.
2. Choose a Good Insurance Rate
Take your time to shop around for the best rate. Get at least 3-4 car insurance quotes so you’ll know what to expect. Start by searching for rates online. A.M. Best is a good resource for different types of insurance and ratings for most insurers. Likewise, InsuranceQuotes.com and InsuranceRates.com are two independent sites that allow you to search for instant quotes.
When comparing different insurers, consider both premium coverage plans and any discounts the company may provide. There are various reasons why insurance providers may offer discounts, such as vehicle safety features, student discounts, and good driver discounts. In many cases, insurance companies don’t volunteer this information. Thus, it’s best to do your own research to determine which discounts you may qualify for.
There are also other ways to bring down your premium, including insuring multiple cars with the same provider, raising your deductible, paying your premium in full up front for the year, and having other types of insurance policies with the same company, such as homeowners or renters insurance.
3. Check Your Policy
If you’re replacing your old car, it’s recommended to check the terms of your current policy. Very often, a newly purchased vehicle is automatically covered for a short period of time (often, a 30-day window) before you need to adjust or set up an additional insurance policy for your new vehicle. Call your insurance company to inquire if you have this benefit.
If you have an existing insurance policy, it’s possible to add a new car to your current policy before you sign the title. Many providers offer multi-vehicle discounts which reduce the cost of additional vehicles added to the policy. You’ll need to provide the insurer all the details about the vehicle such as the VIN, the policy’s effective date, the purchase price, and various other important items.
If you shop around for a different insurer, find out exactly how long you current car insurance will extend as well as the start date for your new policy. Be aware that there might be potential costs involved. You may find yourself subject to early cancellation fees or coverage gaps which leave you driving illegally without insurance, exposed to major financial risk if an accident occurs, and facing higher premiums in the future.
Finally, purchase the car insurance after you have paid for your new auction vehicle. Since proof of insurance is required by law in most states, make sure you have a copy of your insurance card in case you are involved in an accident or get pulled over. Drive safely and keep your credit history clean. Having a bad driving record and/or a high credit score can increase your insurance rates.
Insurance is a crucial step of purchasing a new car. Should you find that perfect vehicle, take your time to do your due diligence and make sure you have everything in place to avoid any unwanted surprises. By following these tips, you’ll be able to drive home happily in your new auction win.
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