How to Estimate Car Insurance Before Buying a Car

Looking for some new wheels? Find out what coverage options you have available.

Feb 2, 2014 at 10:47AM

If you're in the market for a new (or new-to-you) car, you have a lot of financial factors to balance. How much car can you afford? What's the gas mileage? Will it need a lot of repairs? Along with answering these questions, you should find out how much it will cost to insure the make(s) and model(s) you're shopping for.

Though it almost always costs more to insure a new (or newer) car than your current model, there can be wide variations in insurance rates by car, even competing models of the same model year. Before you buy, seek out an insurance estimate for each car you have in mind, just to be sure the cost doesn't change your decision.

Note: For a quick and anonymous way to test your options, run NerdWallet's Car Insurance Estimator Tool. Just plug in your ZIP code, as well as the year, make, model, and style of one of the vehicles, and you'll find estimates for a number of companies offering policies in your area.

Consider the value
Price is obviously an important factor in your decision, but it's not the only factor. Once you've gathered car insurance estimates, eliminate the companies that are out of your price range, but don't automatically choose the cheapest. Maybe a company with a more expensive policy for your particular car also has a feature that would be useful, and is worth the extra cash.

AARP: Apply now

Though the AARP is probably better known for their Medicare supplement plan, it provides a variety of different types of insurance coverage through its partnership with The Hartford, including auto coverage. In addition, its policies' special features could be of particular interest to drivers over 50.

  • RecoverCare. If you're still living in your own home, and don't have family members close by, you may be concerned about how to take care of yourself if you're recuperating from an accident. Through RecoverCare, AARP policyholders can get help paying for assistance with common household chores if they've been injured in their car.
  • Disappearing deductible. Some AARP auto plans come equipped with this feature, which reduces your deductible by $50 every year you maintain a clean driving record. Drivers must have had a clean record for five years to qualify.
  • 12-month rate protection. Once you pick your AARP auto policy, your rates are locked in for a year, compared with the six months many competitors promise.

Liberty Mutual: Apply now

While not the biggest name in auto insurance, Liberty Mutual has a lot to offer consumers, including many perks found at larger companies, and some not offered by its competitors. Each comes as a standard feature of most plans.

  • Accident forgiveness. This feature is increasingly available at many carriers, but Liberty Mutual has a twist. It'll keep your rates the same after your first accident if you've had a clean record for the past five years, regardless of the insurer you've been using.
  • New car replacement. No need to worry if your new car is in an accident. If it's totaled within the first year, before it has reached 15,000 miles, you'll receive money to replace it with a new one, not just a check for the depreciated value.
  • Unlimited rental. Many companies offer some rental coverage. Liberty Mutual, however, provides unlimited use of a rental while your car is being repaired, as long as you choose one of the company's approved facilities.

Look for discounts 
If you find a company you like that costs a little more than you were hoping to spend, give it a call. Many companies have discounts that might bring your rate to a more comfortable level. Or a less-expensive company might have a discount that brings your rate even lower. Many discounts vary by state, though, so check with your insurer before banking on one.

Allstate: Apply now

Allstate drivers can choose from a long list of discounts. At least one is bound to apply to you.

  • Vehicle discounts. Those insuring a new car can save up to 30% on their Allstate premium. If their vehicle is used primarily for farm chores, or is an economy car, they can save up to 10%.
  • Policy discounts. If you've paid your premiums on time over the past 12 months, or agree to have your payments withdrawn automatically, you can save up to 5%. If you agree to receive all of your statements online, you can save up to 10%.
  • Lifestyle discounts. Retired adults, aged 55 and older, can save 10% on their premiums. Full-time students under 25 with good grades can save 20%.
  • Good driving discounts. Like many insurers, Allstate offers incentives for good drivers. Go three years without any violations or accidents, and you can save 22%. Go five, and you can save up to 35%.

Esurance: Apply now

Like its parent company, Allstate, Esurance has many discounts on offer. Some are typical of other insurance companies, including those applying to good drivers, those with multiple policies, and those with certain safety features on their cars. Others might surprise you.

  • Fast 5 discount. Esurance gives those who obtain quotes from their website 5% off their policy for the first term.
  • Switch and Save discount. If you switch to Esurance from another company, it'll take 5% off your rate for the first two terms.
  • Pac-12 discount. If you're an alum of a Pac-12 school, you could save as much as 15% on your policy with Esurance.
  • Emergency Roadside Assistance discount. Like other insurance companies, Esurance does offer roadside assistance coverage on its collision policies. However, if you decide to buy it from another source, Esurance will shave 5% off your rate.

State Farm: Apply now

State Farm is a popular choice for auto insurance and can be very affordable, especially if you qualify for one of its discounts.

  • Multiple Line discount. If you sign up for homeowners, renters, condo, or life insurance with State Farm, you can save up to 17% off your auto premium.
  • Steer Clear Safe Driver discount. As any parent knows, it can be pricey to insure younger, inexperienced drivers. However, if drivers under 25 have a clean driving record for three years and pass a Steer Clear course, their rates could go down up to 15%.
  • Defensive Driving discount. Young drivers aren't the only ones who can save by signing on for extra education. In some locations, drivers can save up to 5% for taking an approved defensive driving course. Unlike with some other insurers, this discount isn't limited to older adults.

Conclusion
Comparison-shopping average insurance rates by car should be a huge priority before you make a final decision on your purchase. Just keep in mind that the rate you see quoted isn't the full story. The value you're getting for your money and the discounts you may qualify for can shift the balance between companies. You may also qualify for unadvertised discounts through partnerships your carrier has with your alma mater or employer, so it's always best to call and ask. While there's no best carrier for every driver, seeking out a series of car insurance estimates before buying -- and verifying them with a call -- should ensure you get the best deal possible.

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