When you buy a new car, you will typically need to get a loan to make the purchase because you more than likely do not have the large sum of money readily available to spend on the purchase. When you purchase the car, you must have insurance on the vehicle before you can pull it off of the lot because many lenders require the vehicle to have full-coverage insurance so that it can be repaired if anything happens to it while there is still a lien against it. Before you go to the dealership to sign the paperwork for the purchase, be sure that you take the time to talk to your insurance company to find out about the information provided below.

Discuss Your Deductible

You need to take the time to discuss how much deductible you want to pay before you buy the car and sign up for coverage. Your deductible is the amount of money you are responsible to pay if anything happens to your car. Once you pay the amount indicated as your deductible, the insurance company will then review your case to see if they will pay for the rest. The damage will be assessed and the company will pay for the specific amount the adjuster determines he or she thinks it will cost to have the repairs completed.

Discuss the Maximum Coverage Offered

You want to be sure that you know how much your coverage will really cost. The policy will max out at a specific amount and you want to be sure that it is high enough to cover potential medical bills and damage to your vehicle. It is often best to get the maximum amount offered for your coverage, if you still have a lien on the vehicle to ensure that as much of the damage is paid for as possible by the company, if you are involved in an accident.

Discuss Gap Coverage

Gap coverage is very important if you plan to purchase a car with a high price tag. When you drive the car off of the lot, its value instantly starts to depreciate. If you were to get into an accident driving home from the dealership and the car was totaled, the insurance company will not pay the full cost of the loan you got for the car. They would only pay the value of the car, which is often a lot less than what you pay for it at the dealer because you have to pay fees and taxes on it. Gap coverage covers the amount of money that still needs to be paid after the insurance company pays the max amount it will pay. This ensures that you do not have to continue to pay for a car that is no longer drivable because the gap coverage will pay the gap in amounts between what you were charged for the car and what it is actually worth.

When you contact the insurance company, they will save your information in their computer so that you can call back after you purchase the vehicle. You can then have your insurance cards faxed to the dealership so that you have proof of insurance before you drive the car away. Be sure to always search for cheap auto insurance.