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Family with new carSo, you finally got that new car you've had your eye on. Now, the only problem is getting covered. Do you have to sign up for a whole new policy? Can you transfer your old policy over to your new car? Will your rates go up? Here's what you need to know:

  • Your current policy will cover your new car as soon as you drive it off the lot. And it will typically continue to provide coverage for the first month after purchase. However, you're going to be covered under your old policy. This can be a problem, should something happen. If your last car was already bought and paid for, then, chances are, you didn't have "gap insurance" — which helps to make up the difference if your car is totaled before your loan is paid off. If you had replacement car insurance, then it was probably for a much cheaper car than the one you're driving right now. You technically have protection right away, but it's inadequate protection.
  • Ideally, you should call your insurer to figure out the next steps before you've even left the dealership. You may be able to adjust your policy or buy a new plan by phone or online to ensure that you never have to hit the road with inadequate coverage on your new set of wheels. Otherwise, you should plan to head into your auto insurance provider's office on the way home.
  • If you plan on keeping your old car, your insurer will expect you to keep the same amount of liability and uninsured motorist insurance on each car. Still, collision and comprehensive will be at your discretion. And just because you want to buy gap insurance or replacement coverage for your new car, that doesn't mean you'll have to buy a similar policy for the old one.

If you're buying a new car, it's a good idea to have the afternoon free. That way, you can work out all the details — just in case there are any complications. But switching your policy over to a new car may be easier than you expect.

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