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June 7, 2024
Mid State Insurance

Tips for the Car Buying Process

What should you be looking for in a new car? Is now the right time to buy a new car? What is the market outlook? What about additional costs like insurance?

white Honda SUV on gray floorIn this blog, you will find out what to consider when seeking to buy a car, the current market environment, and how that purchase will affect your insurance.

When is the best time to buy a new car?

The best time to buy a new car is on a Monday or Tuesday, at the end of the month. The best months to shop for a car are October to January, particularly the month of December. Dealerships are looking to turn over their older inventory to make room for the newer models, so shopping on holidays at the end of the year can also offer significant discounts [6].

Evaluate your finances before buying a car.

Marketwatch also recommends preparing yourself for the car buying process beforehand by evaluating your budget and knowing your credit score. [6].

It is important to know where you stand financially before buying a car. According to CarTalk, a long-standing radio show all about cars, “roughly 80% of car shoppers take out a loan for their auto.” [2] Getting a favorable loan is often highly dependent on having a good credit score [2] ,[6]. If your credit score needs a boost, Marketwatch recommends “trying to improve it before you go car shopping.” [6]  That way, you have more bargaining power in the buying process and will be better able to stick to your budget  [2],[6].

What about the current market?

The current market also plays a key role in the car buying process. The pandemic greatly affected the car industry. Despite now being a better time to buy a new car overall, the prices still have not fallen back down to what they were prior to 2020 [7]. Right now, used cars have higher interest rates and do not offer significant advantages over buying a new car unless they are several years older and a reliable model. [3] There are several advantages of buying a new car such as lower interest rates, warranties, or other special offers. [3]

USA Today reports that the prices and entry to buying Electric Vehicles are much lower now than they were in years past, making cars like Teslas an option for more drivers. Hybrid cars are also popular. [1], [3].

How will it affect my insurance?

Another factor important in the purchase of a new car is insurance. While some dealerships offer a grace period for insuring your new vehicle, others require proof of insurance before driving off the lot. Marketwatch recommends shopping around for insurance beforehand. As with any other vehicle, the insurance rate for a new car depends on several factors including age, gender, marital status, driving history, types of coverage, and other factors. Most lenders require both collision and comprehensive coverage [5]. Additional coverages just for new cars are new car replacement insurance and gap insurance. Both coverages provide additional funds to pay the full value of the new car in the event of an accident [4]. It is advantageous to compare multiple carriers for the best price and the best coverage for your new car. According to Marketwatch’s research, State Farm and Travelers rank among the best companies for a new car [5].

Contact Mid State Insurance Agency to discuss getting your car covered today.

Categories: Auto Insurance

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