When buying a new car, avoid budget-busting premium surprises

By Ryan Hurlbert on March 2nd, 2011

When you are budgeting for a new car, do you think about how your new wheels will change your auto insurance rate? I have been involved in auto sales, arranging auto loans, and auto insurance for many years. I can't tell you how many times I have seen someone stretch to make a car payment fit into their budget only to have the cost of car insurance blow that budget to pieces.

It happened to me once with a motorcycle. I called around for quotes, and found what I thought was a great deal. I bought the motorcycle, paid my vehicle insurance, and then got hit with a "we goofed" notice billing me for an additional $2400 per year. I scrambled, found cheaper coverage, and cancelled the policy.

The motorcycle episode taught me three things that have saved my bacon more than once:

  1. When you narrow your choice down to two or three cars, call your agent and find out what effect each car will have on your auto insurance premiums. Then get a few more quotes just to be sure; one insurance company may consider your dream ride a two-seat sports car, while another may consider it an ordinary sub-compact coupe.
  2. Get the vehicle identification number (VIN) of the car, or the same model, that you are considering. You and your agent may not know all of the models or sub-models of the car, but the insurance consequences can be extreme. The VIN will help verify they are quoting you on the right car. This is where I went wrong on my motorcycle quote.
  3. Use this occasion to update your use, coverage and deductibles. If your use or commute changed, you may be able to save money. For example, I saved 30 percent on the premium of the car I drive daily by switching from business use to commuting as a result of a job change.

The time to find out you can't afford to insure a car is before you buy it! Take a little time while doing your research, and contact your agent. It could save yourself a huge headache and lots of money.

Ryan Hurlbert

Ryan Hurlbert lives and works in the Pacific Northwest. As an insurance agent, he produced and presented educational seminars on various topics from insurance basics to strategies for dealing with teen drivers. He has researched and produced marketing materials in the insurance, auto, and financial industries. Ryan majored in business and received his Bachelor of Science degree from Portland State University.

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