Is buying a new vehicle really a good decision? While you may love that fresh, new car smell, and you may love the fact that you can easily count on the long-term warranty, there are other factors to think about before you make that ultimate buying decision. In short, you need to be sure you have factored in insurance. This is a big investment, but with the right facts, you can ensure you know exactly what to expect.
Know What You Are Buying
Insurance aspects aside, be sure that you are making a wise buying decision based on your ability to repay any loan you take on. You also want to consider if the vehicle is worth the cost to you. Does this vehicle have all of the features you need or is it one that is based on your “wants” instead? Only you can determine if the purchase is a good decision, but it is possible to look at this from a financial standpoint.
Is a new vehicle a good buy? Most insurance companies have no problem providing full coverage to you for new vehicles. They are in good condition and less likely to require significant repairs. However, there are a few other things to consider.
- Sports cars are often much higher priced insurance-wise than your typical sedan. They are considered a higher risk to insurance companies.
- If you buy new with a car loan, the lender will likely require that you have full, comprehensive coverage on the vehicle. This is a requirement until you pay off the loan in full. Only then can you drop down to your state’s minimal requirements.
- Buying a new car is often more expensive to insure than purchasing a used one. The value is significantly higher and that means it will cost more overall to protect.
Think about your needs for this new car. Are the financial aspects of the purchase in-line? If so, the long-term benefits of owning a new car are worthwhile. Look for the most affordable insurance policies by working with an independent insurance agent. This way, you do not overpay for the insurance product you need.
Should you buy that new car? It is up to you to determine if this purchase is good for your bank account and your personal needs. If you are still concerned, talk to your agent before making a buying decision.