Insuring New Car Models: Everything You Need to Know

New cars cost more to insure because they have a higher market value than old cars. This higher value means that the actual cash value (ACV) is also higher. Insurers face more risk with new cars because they'll pay more to replace them than they would with an older car.

If you're buying a new car, consider getting collision and comprehensive insurance. These coverages, also known as full coverage insurance, help pay for repairs and can even replace your car, which can be beneficial as new cars are more expensive to fix. If you're financing the car, think about gap insurance. It can cover the difference between what you owe on your loan and what your insurance pays if you have an accident.

• How to Insure Your New Car
• Mistakes to Avoid
• What It Costs to Insure Your New Car
• Cheapest & Most Expensive New Cars to Insure
• FAQ

Meeting your state's minimum car insurance requirements is a must when insuring your car, but it's often just the starting point. These mandated coverages, while essential, might not be enough to fully cover repairs or replace a brand new car if an accident occurs.

You'll need liability insurance in most state — except New Hampshire and Virginia — which covers bodily injury and property damage if you're at fault in an accident. Some states also require you to carry additional protections like personal injury protection and uninsured/underinsured motorist coverage.

In many states, you won't be able to register your car without the right insurance, and your dealership might ask for proof of coverage before handing over the keys.

Overpaying for coverages you don’t need, signing up for the first quote you get or choosing the wrong deductible can lead to higher rates. And by not comparing enough quotes or asking questions, you may miss out on the best car insurance for you.

New car insurance can be expensive because of the high value of new vehicles. However, insurance costs can vary widely between car models. For example, the average cost of new car insurance for 2022 models is $1,739. Meanwhile, insurance for the cheapest 2022 car model to insure, a Subaru Forester, costs $1,291 per year, and insurance for the most expensive 2022 car model to insure, an Audi R8, is $3,741 annually. Luxury cars or sports cars are often more expensive to insure due to higher repair costs and increased risk factors.

Cars with higher safety ratings may be less expensive to insure, as they are considered less risky. New models with top safety features and ratings might even offset some of the costs associated with insuring a new car.

However, actual rates may vary depending on individualized factors, including your age, car make and model, location and driving history.

While new car insurance can be costly, there are ways to reduce the cost of car insurance. MoneyGeek recommends:

• Shopping around. When looking for the best and cheapest car insurance policy, shopping around and comparing prices can help. Insurance companies have different quotes and offers. Consider getting personalized quotes from at least three insurers.
• Looking for discounts. Insurance companies also offer significant discounts for various circumstances. Some insurers give discounts to cars with safety features. You may also get a discount if you complete a defensive driving course.
• Choosing a higher deductible. If you want lower insurance premiums, you can opt for a higher deductible. However, keep in mind that raising your deductible means you'll have to pay more out of pocket if you file a claim.

While it's generally true that new cars are more expensive to insure than older ones, it's not solely about the car being new — the specific make and model, safety features, coverage options and other factors play a significant role in determining the insurance cost.

While a new car can mean a newly purchased car, it can also be synonymous with a recent model year car. The more current your car’s year, the more expensive it is to insure because it has a higher ACV.

For instance, the average cost of auto insurance for a 2009 Ford F-150 is $1,140 per year. A similar policy for a 2022 Ford F-150 costs $1,409, which is about 23.60% higher.

The Subaru Forester stands out as a budget-conscious choice, averaging an annual insurance cost of $1,291. On the other hand, the Audi R8 is the priciest to insure, with an annual premium of $3,741. Be sure to familiarize yourself with these differences when planning your next vehicle purchase.

Auto insurance for a new car may vary depending on the model. New car models that are worth less money also tend to be cheaper to insure.

Based on MoneyGeek’s analysis, the cheapest new car models to insure are:

• Subaru Forester: $1,291 per year
• Subaru Outback: $1,309 per year

Driving a more expensive model can lead to higher insurance premiums. Not only are they more expensive to repair if anything happens, but new car models that tend to be faster than other cars are also more expensive to cover because they’re seen as riskier to insure.

MoneyGeek evaluated average insurance premiums for different new car models and found that the most expensive to insure are:

• Audi R8: $3,741 per year
• Tesla Model S: $3,365 per year