A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 14, 2021

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You are finally ready to buy your first car. How exciting! Nevertheless, it is important to remember that you must consider more than the sticker price when determining the actual cost of owning a vehicle, such as how much it will cost to insure. Since a variety of factors is used to establish your car insurance payments, your first car may not have expensive premiums.

You can get FREE information about car insurance rates in your neighborhood by typing your ZIP code in the box found here!

When you shop around to select your first car, it is important to choose carefully. Some cars, as well as various features on a car, can actually save you money on car insurance.

Calculating the Total Cost of Ownership

Shopping for your first car can be a scary, exhilarating experience. There are so many models, sizes, and features it is difficult to know where to begin. If you are like most people, you choose to start with what you can afford.

Consumer Reports offers a handy tool that allows you to type in the vehicle model and year and they will give you the total cost of ownership.

The cost of a vehicle encompasses more than just the money you put down for a deposit, the amount of monthly payments or the best offer the seller would accept. It is vital to look at the total figure you will have to pay out of your pocket each month in order to drive it around every day to determine the true cost of ownership.

One of the immediate requirements is fuel for your vehicle. Each type or make of car will have a different number for how many miles per gallon of gas that you can expect. If you plan to travel or anticipate a lengthy commute back and forth to work or school, gas mileage must be a crucial part of your decision in which car to buy. The longer the trip, the higher this should be on your list of must-haves for your new vehicle.

The size of your new car will also affect its gas consumption. Larger vehicles typically get fewer miles per gallon than smaller cars. Also, if you are especially concerned about fuel usage, you can look into purchasing a hybrid or an electric vehicle. They tend to cost a little more than a standard compact car but make up for this in fuel savings.

Repair costs are another consideration in calculating the price of ownership. Foreign or exotic cars will be more expensive to fix if anything goes wrong with your new car. This is primarily due to the availability of parts and the skill required of mechanics to mend a more sophisticated machine.

Car insurance premiums will also need to be factored in to the total cost of vehicle ownership. Some cars cost more to insure than others so it might be worth it to have a conversation with an insurance agent before you sign on the dotted line for your new car.

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Questions to Ask Your Insurance Agent

Everyone wants the best for less and this includes car insurance. To achieve this, it is critical to know the right questions to ask.

One of the things you will need to know is if the company offers any discounts and whether you are eligible for any of them. Even if the first answer is no, do not get discouraged. Sometimes, there are steps you can take, such as signing up for a safe driver course, which can change your status.

You should also have a detailed discussion about how much coverage you will actually require for your vehicle. Ask to have the different terms and coverage options explained to you if you don’t understand them at first. This way, you can be sure that you are not paying for protections you do not really need.

The Importance of Shopping Around for Car Insurance

There are literally dozens of insurance companies vying for your business. However, not every company is a good fit for any driver.

Since you are an individual, your car insurance requirements are unique and you need to find the provider who has the best experience in serving customers with similar situations.

For example, some companies do better with people who have a low or non-existent credit score while others have a superior reputation among people with multiple cars. Only you can decide what is most important for you so spending the time to choose the right provider is worth it.

New Cars Versus Pre-Owned and How the Choice Affects Car Insurance Payments

Depending on your budget, deciding between a used or new vehicle can make all the difference in your choice. Often, there is a big diversity in how much you will pay for car insurance for each one. You can find car-buying guides on the automotive advisor site Autobytel.

For a new car, you may pay more in insurance simply because you want to protect its brand, spanking new appearance. Car insurance is designed to protect you from going broke should anything happen to it. To protect your investment as much as possible, you are more likely to pull out all the stops and opt for as many safeguards as you can get for your new car. It is important to consider collision, liability, and comprehensive coverage in your insurance choices.

In addition, you may also want to guard yourself against theft for a new vehicle. The more attractive your car is to thieves, the more important this becomes. To find out if your dream vehicle is one of those stolen most often, check out this website for the Insurance Institute for Highway Safety, which publishes an annual list.

If you choose to go with a pre-owned car, you might be able to skip some of the coverage options as they may end up costing you more than the actual worth of the vehicle. Taking these things off your list should save you money. However, a used car may not have all the safety bells and whistles like electronic stability control and a laminated windshield, for which you can receive discounts.

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Ways You Can Save Money on Car Insurance for your First Car

The type of vehicle you choose for your first car will be a major factor in how much you pay for car insurance. There are other criteria considered by insurance companies, such as your age and where you live, but the car you select may be one of the only aspects that are actually within your control.

Choosing an electric or hybrid car as your first vehicle might reduce your car insurance bill. Just be sure you find a company that rewards your eco-friendly efforts with a discount.

Some car insurance companies offer savings to customers who belong to certain auto or driving clubs. Your job could also be a key to saving money on car insurance. Find out if there is a special discount, you can get through your employer. This is typically available only to large companies.

Also, just as your parents have probably already tried to tell you, paying your bills on time can be the key to getting reduced rates on everything from credit cards to couches. Auto insurance companies tend to look at your credit history when determining your payment rate so make sure to keep up to date with your credit score.

The Most Expensive Cars to Insure

Not surprisingly, cars that are expensive, high performance, flashy or popular are the ones that will cost you more for insurance. One of the contributing reasons for this is the cost of repair for these vehicles. Unfortunately, there is a criminal market for parts of such cars and thieves are willing to steal your ride just to get them.

Additionally, fancy sports cars with super charged engines also tend to be high on the list. Insurance providers believe that people who choose to drive such a revved up marvel will be more likely to drive faster than allowed and engage in other risky driving behavior, meaning you may have accidents more often. Therefore, the owners of these vehicles can expect to pay more for car insurance.

Cars that cost a lot, in general, are more expensive to insure as well. This is partly due to the increased cost the insurance company would have to pay in the case of total loss of the vehicle.

Some automobiles become a magnet for thieves because of an upsurge in popularity. For example, the Cadillac Escalade, already an expensive car, became more appealing as a vehicle of choice in music videos and on television shows like The Sopranos.

Insurance companies use information, research, and statistical data gathered over many years to rate each vehicle and determine the likelihood of its being involved in a crash. For instance, large family cars like station wagons and minivans have been graded as safer due to figures that show that people who drive them typically use more caution, as opposed to those who drive high performance cars.

Among every day cars, the Mitsubishi Lancer topped the list of having the most expensive car insurance, with the Scion tC and Suzuki Forenza close behind. Others ranked highly include the Dodge Magnum and the Mercedes Benz CLS.

Of course, there are many exotic cars that cost a small fortune to purchase, such as the Bugatti Veyron Super Sports with a base price of $1.7 million and the Aston Martin One-77 that sells for $1.9 million but these are not likely to be a first car. Therefore, as for insurance, if you have to ask, you can’t afford it. More information on the most expensive cars for 2012 can be found in Forbes magazine online.

Shopping for your first car does not need to be a stressful experience. In addition, you should be aware that you probably would not have to break the bank to find something you can afford. There are plenty of reliable and still cool cars available for less money than you may think.

To get car insurance comparisons, click here to type your ZIP code into our FREE search tool and get started today!