If you’re considering buying a used car, you may be wondering what type of insurance you need or if you need it at all. You must have the minimum insurance coverage your state requires before you get behind the wheel.
Buying insurance for a used vehicle isn’t that different from buying it for a brand new vehicle. But there are a few considerations to keep in mind.
If you’re looking for an insurance policy that fits your needs, we can help.
Here’s what you need to know about insurance coverage for a used vehicle.
Do I Need Used Car Insurance?
Whether you buy a new car or a used car, getting insurance coverage is an essential step. Most states require insurance to operate a vehicle, even if it’s a used vehicle.
New Hampshire and Virginia are the only states without auto insurance requirements. However, if you’re involved in an accident in these states, you’re still financially liable.
Insurance requirements differ for a classic car versus a traditional used car. Although a used car policy may cover your classic car to some extent, it’s a good idea to have a classic car policy.
If you live in a no-fault state, you may need personal injury protection (PIP). If you live in one of the 12 no-fault states, you need PIP insurance in addition to the required minimum coverage.
How Much Insurance Do I Need?
Before purchasing used car insurance, consider how much coverage you will need. Minimum insurance requirements vary from state to state. You should at least have the following:
- $100,000 of bodily injury coverage per person
- $300,000 of bodily injury coverage per accident
- $100,000 of property damage coverage
Depending on your used vehicle’s model year and value, you may choose to purchase the minimum amount of coverage required. Minimum coverage typically runs around $60 per month.
If you’re financing your used car, you may want to buy more than minimum coverage.
Other Factors That Influence Car Insurance Cost
The age of your car is not the only factor an insurance company uses to determine coverage rates. The make and model of the vehicle are also relevant.
An insurance provider will consider your driving history and personal factors like your sex, age, and where you live. Age is an important consideration for car insurance companies.
If you’re purchasing a used car for your teenage child, be prepared to pay more in monthly insurance premiums. Insurance companies consider young drivers a high risk.
They have a higher rate of accidents than adults and you pay extra for this potential risk. All of these factors influence the insurance rates you will pay.
Insurance plans that include additional levels of coverage will cost more than plans offering the legal minimum amount of coverage.
Benefits of Buying a Used Car
A new car begins to depreciate in value the moment you drive it off the lot. Many people choose to purchase used cars because they feel it’s a better value for their money.
With a used car, you may have more wiggle room to negotiate a better price. If you’re buying a used car, be sure to verify the car’s history before signing anything.
Typically, insurance costs less per month for used vehicles. Savings for buying a used car include the initial price and monthly insurance premiums.
Many used cars are still under factory warranties. Certified pre-owned vehicles go through a rigorous inspection and often come with an extended warranty.
Whether you choose to purchase a new or used vehicle, you need car insurance. The level of coverage you need depends on the value of the vehicle you choose.
Common Types of Car Insurance Options
There are many options to consider if you need car insurance. Some options include:
Auto Liability Coverage
The two options for liability coverage are bodily injury liability insurance and property damage liability insurance. Liability coverage helps pay costs related to another person’s injury or property damage if you’re responsible for an accident.
There are other types of coverage available to protect you and your passengers if you or they are injured in an auto accident.
Collision and Comprehensive Coverage
Collision and comprehensive coverage pay for physical damage to your vehicle following an accident. The Collision coverage covers damages related to another vehicle or object hitting you.
Comprehensive coverage pays for what collision coverage does not, including flood, fire damage, and acts of vandalism. Typically, these collision insurance policies are optional.
Gap Coverage
Some lenders require you to have gap coverage for a leased or financed car. If your vehicle is totaled in an accident, gap insurance is in place to cover the difference between your car’s value and your outstanding loan balance.
Speak to your insurer about which types of coverage may be best for you. Whether you need additional coverage depends on what’s necessary to protect your vehicle and whether your used car is financed and requires additional coverage.
When Should I Purchase Car Insurance?
In almost every state, you must show proof of insurance before taking your car home from the dealership. If you don’t have insurance when you buy the car, you must show proof of a policy to drive it off the lot.
In most cases, if you already have insurance, you can add your new or used car to your existing policy. Most insurers offer a grace period of a week to a month for you to add a car to your policy.
During the grace period, your existing policy will cover the newly purchased vehicle, even if you haven’t added it to your policy yet.
Don’t wait to add your vehicle to your existing policy. If the grace period lapses and you have an accident, you may not have the coverage you need to pay for damages.
Save Money Buying Used Car Insurance
If you’re looking for auto insurance for your used vehicle, you probably want the best deal possible. The following tips may help.
Shop Around for Rates
Take the time to compare rates from different insurers. Each company is different in determining its rates.
Shopping around gives your the best chance of finding an affordable policy that suits your needs.
Bundling Car Insurance Coverage
Many insurance companies offer discounts for bundling insurance coverage. You may be able to get a discount if you bundle your auto, home, and even recreational vehicle insurance.
You may not get the same savings if you purchase each type of coverage separately.
Ask for Discounts
Be sure to ask about any potential discounts an insurer may offer. Many insurers offer discounts for students, seniors, first responders, veterans, and others.
You can save money by simply inquiring about possible discounts.
Look Into Specialty Insurance
If your car is very old or has collector value, you may want to buy classic car insurance. There are some restrictions with this type of coverage, but it’s typically cheaper than standard car insurance policies.
Buying Used Car Insurance
Buying used car insurance is a simple process. It’s similar to buying new car insurance. You can shop for insurance online or speak to insurance agents by phone or an online chat.
Once you test-drive your used car and are ready to purchase it, you need to buy used-car insurance. Steps to take include:
- Get online quotes
- Decide on the level of coverage you need
- Understand the rates and the deductible
- Compare your price quotes
- Get advice from an insurance professional
Even if you’re not ready to buy a used car, you can benefit from getting insurance quotes in advance. Researching price quotes helps you get a clear picture of the costs involved.
This can help you make the best decision about the type of auto insurance you need and can afford. Although it may be possible to buy a used car from a private seller before you have insurance coverage, you must have insurance to register your vehicle.
Taking the time to research insurance companies and their rates can help ensure you have the affordable coverage you need for your used car.
Buy the Right Used Car Insurance for Your Vehicle
Buying a used car is a popular choice for many consumers. They see the value in a quality car at a lesser price.
Another benefit is cheaper car insurance rates. If you’re considering buying a used car, you will need used car insurance before you can enjoy driving your vehicle.
If you’re in the market for a used car, Schumacher Used has been serving New Jersey families for almost 100 years. We offer a wide variety of quality used vehicles and would love to help you find the perfect one for your needs and lifestyle.
Contact us today to get started.
