a car

New year. New you. New…car?

Statisically, January is the most popular time of year for buying a new car. And we see why! What better way to drive into the new year than in a newer, shinier, safer car?

But when new car shopping, are you doing all your homework? In addition to ordering the CARFAX, taking the vehicle for a test drive, reading safety ratings and reviews, and maybe even having your mechanic give it a once-over, there’s still one more thing to do. And that’s your insurance homework.

In fact, members tell us they wish they’d have known these three things before driving their new car off the lot…

Three insurance tips to keep in mind when shopping for a new car

1.   The model you choose affects your premium. You’d expect that a newer car would cost more to insure than the older, more depreciated car you’re replacing, right? But did you know that similar-looking cars can have dramatically different rates? For example, performance features (like high horsepower and turbo charging) cost more to insure. Certain makes and models tend to be thief magnets, requiring higher rates. And some features that make cars safer, like cameras and sensors, paradoxically make them more expensive to repair if they do get into an accident.

If you’re comparing two models, one deciding factor might be their cost to insure. Before you purchase, it’s important to compare rates. You can always log into your account or speak with one of our licensed agents to compare (1-800-467-3626).

2.    Your existing coverage temporarily extends to your new car. So that you can drive your new car home with confidence, your PEMCO protection automatically covers it, giving you time to notify us. But here’s where things can get tricky. If you’re replacing a car (that you no longer own), the new car automatically will have the same coverage as the car you replaced for 60 days in Washington state and 30 days in Oregon. If you’re adding a car, it automatically will have the broadest coverage available for any car on the policy for 30 days.

You’ll want to be mindful if you currently don’t have comprehensive and collision coverage on your cars (owners of older cars often drop them to save money), because that affects whether or not the new car’s automatic protection will include it. Check your policy to confirm coverage or, for instant peace of mind, go online or call us to list the car on your policy as soon as you take the keys.

3.     Consider gap insurance or Auto Loan/Lease Coverage if you’re financing the car. A new car becomes a used car the moment you drive away, meaning it depreciates in value. Steep depreciation continues during the car’s first two years. If you’ve financed most of its purchase price and it gets totaled in a loss, you could find yourself underwater on your loan – owing more on the car than you’ll receive from insurance. That’s because insurance pays based on the car’s actual cash value at the time of the loss, not its purchase price or the amount financed. To avoid that risk, you can add “gap insurance” from your lender, or Auto Loan/Lease coverage, when you get it through PEMCO.

Whether you’re looking at a brand new 2024 model with all the bells and whistles to drive off the showroom floor, or shopping used for a safe and economical vehicle for your family or a young driver in your life, keep these insurance tips in mind.

Remember, you don’t have to go at it alone. Our licensed agents are here to guide you through your insurance journey and any questions that may arise as you consider a new car.