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How Much Does New Car Insurance Cost?

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Buying a new car can be an exciting journey, but it also comes with additional responsibilities, including finding proper auto insurance. Before you commit to any insurance company, it’s important to analyze which company can offer you better rates, discounts, and perks than the others. Investing in a brand-new car is an important financial decision, so it’s just as crucial to choose the best protection policy to ensure it maintains its value. Read on to learn more about buying car insurance for new vehicles and tips for saving on insurance premiums.

What Is Car Insurance?

Car insurance is a type of agreement that an insurance company makes with a customer who is typically the driver. In this agreement, the customer pays a monthly premium to protect their vehicle. In the event of a collision or another damaging incident, the client (or their representative) can report the incident by submitting a claim to the insurance company. This claim should typically have the customer’s contact information and details about the incident, including witness statements or a police report.

The auto insurer looks over the claim and decides if it falls within the client’s coverage plan, and if it does, they will assist the client in paying for any liabilities or damages. The extent of coverage depends largely on the type of plan the client has, with some people finding it valuable to pay more in premiums in exchange for greater protection in the event of an accident.

How Much Does New Car Insurance Cost?

Car and Driver reports that, according to the National Association of Insurance Commissioners, the average cost to insure a new vehicle is approximately $583.73 for liability coverage. According to Policygenius, the average American pays $1,652 per year on average for a more full auto insurance coverage plan that includes other protections such as collision, comprehensive, and physical damage.

Does Insurance for New Cars Cost More?

Insurance for new vehicles can cost more than older ones mainly because newer vehicles have more value, meaning it can cost more to repair and maintain them than older models. By charging more for premiums on new cars, insurance companies can create a safety net if they do have to pay more as part of their coverage services.

How much you pay in insurance premiums can vary from person to person. Some of the major determinants of your car insurance premiums can include:


Your age can contribute to how much you have to pay in car insurance premiums, especially if you’re a young or senior driver. New drivers tend to pay higher rates because of their inexperience, while seniors often pay more due to their lower response time and higher incidence of getting into accidents.


Your actual vehicle can make a difference in your monthly insurance payment. Typically, more expensive cars cost more to insure because of how much it can cost the insurer to make repairs for these luxury vehicles, as their parts are often much more pricey.


Where you live can also impact your monthly premiums, especially if you’re living in a remarkably populated or rural setting. Areas with high traffic tend to have higher rates, as there’s more chance of collisions, and rural areas often have lower premiums because of low traffic levels.

Driving Record

It’s also common for car insurance companies to analyze your driving history to determine how much of a financial risk you are and whether they can trust you with a discount. Typically, drivers with clean driving records can receive a discount because they’re less likely to need coverage.

Tips for Saving on Car Insurance

Here are some tips you can follow to help save money on your monthly or annual auto insurance premiums:

Pay Your Premium in Full

The first tip for saving on car insurance is to pay your premium in full if you have the financial means. While this would require you to pay more out of pocket at once, you can save hundreds of dollars overall on your auto insurance by avoiding monthly payments. Many insurance companies give substantial discounts to customers who offer to pay their premium annually instead of monthly, with some offering savings ranging from 10% to 20%.

Raise Your Deductibles

You can also save money on car insurance by requesting to raise your deductible. In the world of insurance, a deductible refers to the amount you pay out of pocket before your insurance coverage takes over. In other words, if your car suffered $5,000 worth of damage and you have a $500 deductible, you would pay the first $500 for repairs, and insurance would cover the remaining $4,500. By increasing your deductible, you can effectively reduce the amount you have to pay out of pocket in premiums and in the event of an incident that requires coverage. You can avoid these scenarios and save money on your monthly premiums by practicing safe driving.

Look for Discounts

The final tip for saving money on your monthly premiums for car insurance is to conduct in-depth research about the various discounts different companies offer. Some standard discounts car insurance companies provide include having a safe driving record, taking a defensive driving course, having good grades as a student, or installing safety or anti-theft devices or equipment in your vehicle.

With this information, you can feel confident when searching for the right car insurance company and planning for your new vehicle. Remember to use all your resources and cross-examine your options to ensure you get the best deal for your circumstances and can provide yourself and your assets with proper protection for years to come.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.


About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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