When you are comparing policies for new car insurance, you will find dozens of auto insurance companies advertising the lowest rates and best features. The car insurance market is complex and fragmented, so it can be difficult to know if you are getting the best deal. Here are some best practices to compare new car insurance policies.
1) Pick specific policy features
Before you receive a quote on new car insurance policies, decide what specific features you need to find in your policy. Many new car buyers fall into the trap of comparing different types of policies from different insurance companies. A high-deductible, low-collision coverage policy from one auto insurer will definitely be cheaper than a zero-deductible, full-replacement policy from another. It is impossible to compare both the policy and price differences simultaneously.
A best practice to compare new car insurance is to choose specific policy features before requesting a quote. Set a deductible, pick an amount of coverage, and choose your payment option before you contact any car insurance company for a quote. By setting the specific policy terms in advance, you can ensure that you are comparing identical policies when receiving quotes from multiple companies.
2) Use multiple comparison sites
When shopping for new car insurance, your first stop should be websites that allow you to compare auto insurance quotes from different companies. The two largest sites, Insurance.com, ask for your information once, then transmit a request for a quote to different insurance companies. In most cases, you will be presented with an immediate quote from each of the largest car insurance companies.
These sites allow to save substantial time by receiving multiple quotes after entering your information just once. In addition, because you can see the quotes from different insurance companies, you can easily find a cheap deal for your particular policy. You can adjust features of your policy and see how a higher deductible or increased coverage will change your quote.
Note that comparison shopping websites make money by receiving a commission on every policy that is sold through one of their quotes. This means they only provide quotes from insurance companies that offer a commission on sale. Many small, regional insurance companies do not offer kickbacks and are thus not listed on comparison websites. If you live in a rural location or have very specific needs, you may want to visit the websites of your local insurance companies to receive more detailed quotes.
3) Avoid your dealer’s recommendation
In some areas, it is acceptable for a new car dealer to have a business relationship with an auto insurance provider. In these locations, the dealer will receive financial or non-monetary benefits from referring a new car purchaser to a specific car insurance company. The quotes for a new car insurance policy will be higher under these circumstances than if the new car buyer had shopped around for the best quote.
Feel free to take your dealer’s recommendation regarding a car insurance provider, but be sure to compare the quote from that company against the quotes from other insurers. Remember to set the features of your policy prior to receiving a quote to ensure you can compare similar products.
Buying a new car can be a great experience, but few purchasers feel as excited about buying auto insurance for their new vehicle. Follow these recommended best practices for comparing new car insurance and you will save some money on your next new automobile insurance policy.