Do New Cars Cost More To Insure?

Why New Cars Typically Cost More to Insure

There are a number of reasons why new cars often cost more to insure than older cars, such as:

• Higher value: A new car often carries a higher market value than an older car. Therefore, an insurer might charge a higher premium to account for the potentially greater cost of replacing the new car if it's totaled.
• Lending requirements: Companies that provide loans or leases for new cars might require comprehensive and collision coverage, rather than just mandatory liability coverage. This extra coverage generally raises the cost to insure a car.
• Newer safety features: New cars typically come with modern safety features, and that technology may cost a lot to repair.
• Pricey repairs: It might cost more to fix a new car, especially a luxury car, than an older car. For instance, a new car typically features more advanced technology and higher-value materials than an older car, potentially leading to a higher repair bill.
• More collision claims: Some make and models of new cars might trigger more frequent and more expensive collision claims than an older car. This may prompt an insurer to charge higher rates.
• Higher theft rate: A new car may be targeted more often by thieves than an older one, and your insurance premium might reflect that risk.

Learn more: Minimum Car Insurance by State

How Much Does It Cost to Insure a New Car?

How much it costs to insure a new car depends on a variety of factors, including the car's make and model, your location, your driving record, your age and the type of coverage you have. However, you can get a general idea of how much you may pay by looking at national averages.

Source: Experian data for February 2026, based on policies sold through its automotive insurance marketplace

Unless you're paying cash for a new car, you'll likely sign a loan or lease to pay for it. Since lending and leasing companies typically require comprehensive and collision coverage, you'll probably wind up with a bigger insurance premium than if you purchased an older car.

Learn more: Average Cost of Car Insurance in the US

What Car Insurance Coverage Do I Need for a New Car?

Typically, you'll need to buy at least liability insurance for a new car. But you may also be required to purchase comprehensive and collision coverage, uninsured and underinsured motorist coverage, or personal injury protection (PIP) coverage.

Car Insurance You May Be Required to Buy

At the bare minimum, you'll almost certainly be required to purchase liability insurance. Every state, except New Hampshire, requires drivers to carry liability insurance, which pays the costs of property damage and injuries to other people in an accident that you cause.

In addition, you may be required to buy:

• Comprehensive and collision coverage: Comprehensive coverage pays for non-crash claims involving your vehicle. This can include theft, along with damage due to fire, fallen objects or weather. Collision coverage pays for damage that your vehicle sustains in an accident.
• Uninsured and underinsured motorist coverage (UM/UIM): Some states require drivers to purchase uninsured motorist coverage, or both uninsured and underinsured motorist coverage. If you get into an accident with a driver who has no insurance or inadequate insurance, uninsured and underinsured motorist insurance will kick in.
• Personal injury protection coverage: Some states require motorists to purchase PIP coverage. This covers medical bills, funeral expenses and lost income arising from injuries to you and your passengers, regardless of who caused the crash. A similar type of coverage, medical payments (MedPay) coverage, is required in New Hampshire and Maine.

Car Insurance Extras You Might Want to Buy

Although normally not required, here are a few types of coverage that you might consider adding to a policy for a new car:

• Rental reimbursement: Rental reimbursement covers the cost of renting a car while your car is being fixed due to damage covered by your policy.
• Roadside assistance: Roadside assistance coverage pays for towing, tire changes, emergency fuel delivery, battery jump-starts and vehicle lockouts when your car breaks down.
• Gap coverage: Gap insurance covers the difference between what your vehicle is worth and what you owe through a loan or lease if your car is heavily damaged or totaled in an accident.
• Glass coverage: This policy add-on covers damage to a car's windshield, side windows, rear windows and glass sunroof.

Learn more: Benefits of Auto Insurance

How to Get Car Insurance for a New Car

Follow these six steps to get insurance for a new car.

1. Reach Out to Your Current Insurance Company

If you already insure a vehicle, contact your insurance company before you purchase a new car. Depending on where you live, your insurer might give you a grace period for covering your new car. This gives you time to switch existing coverage to the new car or look for a new policy.

If you're financing your new car, you might need to buy coverage to drive the car off the lot, depending on the lender's requirements and your existing policy.

2. Shop for Insurance

If you don't already have coverage, don't delay. You can purchase coverage the same day you buy your new car, but it's wise to do your homework before getting a policy. The Insurance Information Institute suggests getting quotes from at least three insurers to find the right coverage at the right price.

3. Check Licensing

Before buying a policy, be sure the company is licensed to sell insurance in your state. Also, search online for reviews about customer service and coverage.

It's also a good idea to check how financially healthy the insurer is. Five independent agencies—A.M. Best, Fitch Ratings, KBRA, Moody's and S&P Global Ratings—evaluate the financial status of insurers.

4. Figure Out Your Coverage Needs

Whether you plan to transfer your coverage or buy a new policy, you'll need to determine what kinds of coverage to purchase.

Does your lender require comprehensive and collision coverage? Does your state mandate that you buy PIP coverage? What extras would you like to have? You'll want to answer these and other questions before buying a policy.

5. Choose a Deductible

A deductible is the amount you pay toward a claim before your insurer provides a payout. A higher deductible typically means lower monthly premiums, and vice versa.

Example: If you submit a $3,000 accident claim and you have a $500 deductible, you'll cover the first $500 before your insurance coverage takes effect.

6. Provide Proof of Insurance to the Dealer

Dealerships require that you show proof of insurance before you drive away with your new car. You might be able to use your current policy (but only if your insurer offers a grace period) or, if you're buying new insurance, reach out to the company for verification of the coverage.

Frequently Asked Questions

The Bottom Line

New cars often cost more to insure than older ones because they're worth more, cost more to repair and typically require full coverage if they're financed or leased. Most drivers must carry liability insurance, and lenders usually require comprehensive and collision coverage for new vehicles. Before buying, compare quotes from at least three insurers to understand the true cost of owning your new car—and potentially save money.