Car buying can be intimidating. Insurance is a small part of the process, but we think it’s an important one. Although insurance seems like a hassle, it’s an important part of protecting yourself, your passengers, and your vehicle.
Here are the three steps to selecting insurance when buying a new car:
Step one is important step for anyone, especially if you’re on a budget. Once you’ve narrowed your preferred car down to three or fewer, call your insurance company for quotes. Monthly payments can differ significantly between makes and models. If you’re financing the car, your lender will require comprehensive and collision coverage in addition to liability, so don’t forget to include that coverage. That convertible or four-wheel drive may not be as appealing when you consider the cost of insuring it.
If you need a resource, our insurance partner offers free quotes, which include group discounts for 1st United members!
After you peel off the lot and feel the wind in your hair, you must update your insurance information. It may be less exciting, but your insurance provider needs to know who financed your car. The insurance company will update your policy and give you a new declarations page showing the coverage and naming your financial institution as the lienholder.
The final step causes the most confusion for our members. Your financial institution needs to know about your insurance. If your lender doesn't receive proof of comprehensive and collision coverage showing their name as lienholder or loss payee, they can “force place” insurance. That means they add insurance to your loan, which increases your monthly payment.
Don't send your lender your insurance card - it doesn't t show enough details. The best bet is to send in your declarations page, which will show the coverage amounts and include the name of your financial institution as the lienholder or loss payee. For 1st United auto loans, simply contact your insurance provider and tell them you’ve financed your auto with us, and they will take care of the rest.
If you have questions about selecting insurance when buying a new car or about financing, email us or call us at (800) 649-0193. Good luck on your car shopping!