Simply owning a new car can qualify motorists for a 10 – 15% vehicle insurance discount from a few companies. GEICO and Travelers offer this savings to the owners of automobiles, which are less than 3 years old but Allstate requires the auto to be only one year old and you must be the first owner. According to Travelers website this discount isn’t available in California.
New Car Discount from GEICO appears to be the largest at 15% and more inclusive as it allows the owners of vehicles up to 3 years old to qualify for it. Their website says that the discount is applied to certain coverage but doesn’t clarify which coverage. When a discount doesn’t apply to your entire bill its effectiveness may be lost substantially. This is something to keep in mind. Also, it is assumed that you can keep saving until your vehicle reaches 3 years old.
Traveler’s new vehicle insurance discount is also offered for up to 3 years and it is up to 10%. Allstate only provides this saving to automobiles under one year old and a further condition attached to it making it only available to first owners.
Usually, similar discounts are offered to entice new motorists in the hope that they will stay with the company for a long time. However, GEICO genuinely offers one of the cheapest auto insurance rates for the owners of new vehicles, according to a price comparison study on thezebra.com website. Allstate ends up being one of the most expensive and Travelers don’t appear on the list.
Nationwide and State Farm don’t offer any specific discounts for owning a new automobile but they are two of the cheapest vehicle insurers for motorists with a fairly new car. Farm Bureau, Erie and Auto Owners are other good choices to consider, although they may not be available in every state.
So, qualifying for discounts is great but getting the best price is an entirely different thing. Motorists should not fall into honey traps by following the discounts and going with the company offering it without getting alternative quotes from a few other carriers. In the end, what really matters is the final price and it may be offered by an auto insurer with the lowest rates and not necessarily by a company with the most discounts.
According to the same The Zebra study, new vehicle owners are paying on average 22% higher car insurance premiums in comparison to the owners with a 5-year-old automobile for the same coverage. This is due to the fact that a brand-new auto is more valuable than the older models and costs more to repair and replace them.
So, owners clearly need to shop around harder to find every little discount and cheapest carriers. Everything being equal, finding the lowest priced insurer for your circumstances can reduce premiums substantially as it is clearly evident by the above State Farm example.
If you are considering buying a latest model automobile, you should keep the insurance costs in mind. You are likely to keep the vehicle for a long time and you may end up saving a lot of money if you can go for a car that is fairly cheap to insure in comparison to similar vehicles in the range.
This doesn’t mean that you have to give up on owning a certain type of vehicle because it is too expensive to insure but being conscious of its engine size, speed capabilities and safety ratings can allow you to choose well. For example, auto insurance for SUVs tends to be expensive but there are still many SUVs with great insurance ratings. Choosing one of them instead may be a good compromise and save you a lot of money on premiums in the long run.