The Best Car Insurance Companies for a New Car

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Written by Rayna Opoku Edited by Quiana Darden Reviewed by Amanda Clear

Updated February 1, 2023

Purchasing a new automobile can be an exciting experience. The rush of driving a new car off the dealer’s lot, a spotless exterior and interior, a single-digit odometer, and that new car smell is something we all love.

On the other hand, purchasing insurance for a new vehicle can be difficult. You want to find the best coverage and there are so many options on the market.

It’s essential to take your time with selecting your insurer. Although many drivers want to make a quick decision so they can get on the road ASAP, taking the time to research coverage and compare prices can save you a lot of money in the long run.

We’ll help you get started on your search. Let’s review some of the best car insurance companies for a new car. 

Key Takeaways 

• The price for auto insurance for new cars depends on several factors, such as its make and model, the age and driving history of the driver, and the location where the vehicle is driven and parked.
• Gap insurance and new car replacement coverage are great add-ons to your policy when you have a new car. 
• Vehicles with the newest safety technology can make you eligible for significant discounts. 

Best Car Insurance Companies for a New Car

Various criteria determine the best auto insurance company for a new car. Each insurer has advantages and disadvantages, and what works for one driver may not work for another. To help you get your search started right, we’ve listed a few excellent options for new car owners.

Allstate 

Allstate offers a solid blend of cost and customer service and the opportunity to purchase new car replacement coverage.

A new automobile loses value immediately after purchase. Therefore, if you are in an accident shortly after the purchase of your automobile, your claim will reflect the reduced value. However, if you get new car replacement coverage from an insurer like Allstate, the payout will equal the value of a brand-new car as long as it’s less than two years old.

Allstate scored #79 on Fortune’s Top 100 list for 2019, with a yearly revenue of more than $44 billion. Best recognized for its motto “You’re in Good Hands,” it insures over 16 million households.

Pros:

• Provides new automobile replacement coverage
• Minimal complaints from customers

Cons:

• Not one of the most affordable insurance providers
• Policies are only available in six-month periods

Ratings: 

• Better Business Bureau: A+ 
• J.D. Power: 858/1000
• Clearsurance: 4.03/5

Discounts: 

Allstate offers a variety of vehicle insurance discounts, including:

• Anti-Lock Brake Discount: Your premium will decrease if your vehicle has anti-lock brakes.
• Anti-Theft Device Discount: Installing anti-theft equipment on your car can help you shave a bit off your rate.
• Multiple Policy Discount: Choose Allstate for your additional insurance needs to save even more money. 
• New Car Discount: If you’re the initial owner of a vehicle from the current model year or one year earlier, you can save on insurance.
• Safe Driving Club: When you join Allstate’s Safe Driving Club, you may take advantage of their most significant discounts.
• Early Signing Discount: You will receive an additional discount if you purchase a new plan at least seven days before your existing one expires.

Coverage: 

Allstate coverage is available nationwide.

Insurance Coverage: 

• Liability coverage  
• Collision coverage
• Comprehensive coverage  
• Personal injury protection 
• Medical payments
• Uninsured/underinsured motorist coverage 

Optional Coverage:

• Personal umbrella policy 
• Rental reimbursement coverage 
• Classic car insurance 
• Mexico auto insurance 
• Roadside assistance plan 

GEICO 

GEICO, known for its friendly gecko mascot, is the nation’s second-largest vehicle insurance business. They are renowned for their low prices and allowing customers to buy vehicle insurance online and over the phone.GEICO has an excellent reputation, and in the J.D. Power 2022 U.S. Auto Insurance Study, it ranked among the top three insurers in Texas, New York, and the Central and Northwest Regions.

While GEICO provides reasonable insurance rates to most drivers, high-risk drivers may not receive the same low prices. Additionally, if you have a new car and want gap insurance you’ll have to go elsewhere.

Pros:

• Offers a variety of discounts
• Provides a wide range of nationwide coverage options to customers

Cons:

• Does not offer gap insurance
• Not recommended for drivers with a bad driving history 

Ratings: 

• Clearsurance: 4.13/5 
• Better Business Bureau: A+ 
• J.D. Power Rating: 871/1000 

Discounts:

GEICO is well-known for offering a plethora of discounts, including: 

• Advanced Safety Features Discount: Vehicles with anti-lock brakes or an anti-theft system can save on their premium
• Multiply Policy Discount: Bundle motorbike, life, business, and other coverages under one plan to save money
• Good Student Discount: For students with good grades you can save on your policy
• Military Discount: Being a member of the military, whether active or retired helps you score a discount on your premium
• Defensive Driving Discount: Completing a defensive driving course that has been certified by the state can shave some money off your rate
• Safe Driver Discount: Five-year good driver discount for five years of driving without an accident earns you a safe driver discount

Coverage:

GEICO isn’t available in Alaska, Hawaii, Louisiana or  Massachusetts

Coverage Options: 

• Auto liability insurance 
• Comprehensive coverage 
• Personal injury protection 
• Medical payments
• Uninsured/underinsured motorist coverage

Optional Coverage:

• Emergency roadside service 
• Rental reimbursement 
• Mechanical breakdown insurance 
• Rideshare insurance 
• Life insurance 

Progressive 

The Progressive Corporation, founded in 1937, has grown to become one of the leading vehicle insurance carriers in the United States. Along with the typical home, life, and auto Insurance, it specializes in insuring R.V.s, boats, motorbikes, and commercial vehicles.

Progressive was the first insurance business in the United States to accept installment payments for premiums and claims. The strategy simplified and increased the accessibility of vehicle insurance for everyone. They were also the first insurer to provide 24/7 claim reporting.

Pros: 

• Offers special coverages such as custom parts and equipment (CPE)
• Has a usage-based insurance option available called Snapshot

Cons: 

• When comparing average national vehicle insurance premiums to other large insurers, they are often in the middle of the pack
• They offer the highest rates for young drivers

Ratings: 

Clearsurance: 4.1/5 

BBB: A+ 

J.D. Power: 856/1000

Discounts: 

• Continuous Insurance Discount: You may be eligible for a discount if your policies were still in effect with your previous insurer when you transferred to Progressive. The discount you receive will vary. 
• Multi-Car Discount: You will save about 12% by listing multiple vehicles on your policy.
• Snapshot Discount: Good drivers can receive significant savings. You must download and set up the Snapshot app, which monitors driving behavior. 
• Distant Student Discount: If you include a full-time student on your policy who lives 100 miles away from school and doesn’t bring their car, you can save.
• Pay-in-Full Discount: To save money, pay the entire six-month premium upfront.
• Teen Driver Discount: If you have a teen driver on your account, they’ll enjoy this discount. 
• Automatic Payment Discount: You will get a discount if you set up an automatic monthly payment. Policyholders cannot combine it with the pay-in-full discount.

Coverage: 

Progressive offers coverage nationwide. 

Insurance Coverage: 

• Auto Liability insurance 
• Collision coverage
• Comprehensive coverage 
• Personal Injury Protection 
• Medical Payments
• Uninsured Motorist /Underinsured Motorist Coverage

Optional Coverage: 

• Loan/Lease Payoff 
• Rental Car Reimbursement 
• Custom Parts and Equipment Value 
• Rideshare Coverage 
• Roadside Assistance 

How to Insure a New Vehicle

To insure a new vehicle, you must purchase an insurance policy that meets your needs and budget. Here are the steps you can follow to insure a new car:

1. Research different insurance companies and compare quotes. You can do this online or by contacting insurance agents directly. At Compare.com we make it easy. Simply use our auto insurance comparison calculator and you can compare rates from top insurers to find the best price. 
2. Choose a policy that meets your coverage needs and budget. Consider the types of coverage offered, the deductible, and premium.
3. Gather the necessary documentation. You’ll need various items such as proof of ownership, the vehicle’s make, model, and vehicle identification number, and your personal information and driving record.
4. Apply for insurance with the company you have chosen. Be sure to provide all of the required documentation.
5. Pay the premium for your policy. Most insurers allow you to easily pay online. 
6. Keep proof of insurance in your vehicle. This can be a physical card or an electronic version, on your phone.
7. Review your policy regularly. You want to do this to ensure it still meets your needs and to take advantage of any discounts that may be available.

How Car Insurance Changes When You Have a New Vehicle 

Well, you’ve finally got your new set of wheels. But before you go cruising around town, understand a few things. 

When you get a new vehicle, your car insurance may change in a few ways:

• Your premium may change: The make, model, and age of your vehicle can all impact your car insurance premium. If you have a new, high-end vehicle, your premium may be higher than your older car. On the other hand, if you have a new, safer, and cheaper car, your premium may decrease.
• Your coverage can change: You may need to adjust your coverage when you get a new vehicle. For example, if you financed your new car, your lender will require you to carry comprehensive and collision coverage, while a car paid in full doesn’t require the same coverage.
• Your deductible may change: Your deductible is the amount you must pay out of pocket before your insurance kicks in. If you have a new vehicle, consider adjusting your deductible to a lower amount to save on premiums.
• You may be eligible for discounts: Some insurance companies offer discounts for new vehicles, so be sure to ask your agent about possible discounts.
• You may need to update your policy: When you get a new vehicle, let your insurance company know so they can update your policy to reflect the change and ensure you have the right coverage.

Insuring a new vehicle may cost more than it does for an old one since new cars are typically more expensive to repair or replace than older vehicles. Thus, the insurance company may charge a higher premium to cover those costs.

However, other factors can impact the cost of car insurance such as the vehicle’s make and model, age and driving history of the driver, and the location. So insuring an old vehicle could be more expensive than insuring a new one, depending on these and other factors.

It’s always a good idea to shop around and compare quotes from multiple insurance companies to find the best deal on car insurance for your new vehicle.

Ways to Save on Car Insurance When You Have a New Vehicle 

It’s normal for your car insurance to rise after purchasing a new vehicle. However, this doesn’t mean you’ll be stuck with a premium you can’t afford. Here are a few ways you can save on car insurance when you have a new vehicle:

• Shop around and compare quotes: Don’t accept the first quote you receive. Get prices from multiple auto insurers and compare them to find the best deal.
• Consider a higher deductible: Choosing a higher deductible can lower your premium, but be sure you can afford the increased out-of-pocket costs if you need to file a claim.
• Take advantage of discounts: Many insurance companies offer discounts for things like having a good driving record, being a good student, and having multiple vehicles on the same auto policy. Be sure to ask your agent about possible discounts.
• Consider alternative coverage options: Usage-based or pay-per-mile insurance can be cheaper for infrequent drivers.
• Choose a safer and cheaper car: The make, model, and age of your vehicle can all impact your car insurance premium. If you have a new, high-end vehicle, your premium may be higher than your old vehicle’s. 

Tips to Find the Best New Car Insurance Company

It can take time to determine the best car insurance company. When shopping for low-cost automobile insurance, remember that the best policy isn’t necessarily the cheapest.

Here are a few tips to help you find the best car insurance company:

• Check the financial strength of the company: Choose a financially stable company, as it will be better able to pay out claims if you need to file one. You can check a company’s financial strength by looking at ratings from independent agencies like A.M. Best or Standard & Poor’s. 
• Consider the claims process: Choose a company with a reputation for handling claims reasonably and efficiently. Ask your agent about the claims process and what to do if you need to file a claim. 
• Consider the level of customer service: Choose a company with a reputation for good customer service. You will likely have to interact with them if you need to file a claim or have questions about your insurance products. Look for reviews and ratings from current and former customers to understand how the company treats its policyholders.

FAQs About Best Car Insurance Companies for New Cars

Do drivers with new cars pay more for their car insurance? 

Insuring a new vehicle can be more expensive than an older one, depending on several factors like make and model, the value of the car, and purchase location. 

What are some of the best policies for new cars?

When you buy a new automobile, gap coverage and new car replacement coverage are excellent additions to your insurance.

What is the best car insurance company for new car drivers?

Some of the best car insurance companies for new drivers include Progressive, GEICO, and Allstate.

Rayna Opoku Auto Insurance Writer

Rayna Opoku is an expert content writer who has spent the last two years creating in-depth guides and articles for the auto insurance industry. With over four years of experience writing for various companies, she's able to make even the most complicated of concepts sound simple and straightforward. When she's not writing about car insurance, you can find her exploring the next Fintech trend, smashing birdies down the badminton court, or sipping a mocha at her favorite cafe.