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Car Insurance

New Cars with Free Insurance

As a marketing tool to entice new and repeat customers, some auto mobile dealerships offer free insurance with the purchase of a new car. Many auto retailers will provide differing levels of cover and benefit packages with cars, depending on the value of the car, the financing terms or sometimes the preference of the customer.

New cars with free insurance provided removes the immediate financial burden on the car customer. In a normal scenario, the customer must pay a down payment on the car and a down payment on the comprehensive cover for that new vehicle, often financed by a bank loan, which requires that high level of coverage. Whilst this free insurance with new cars is not a permanent arrangement, it allows the new owner to drive that shiny new car home and a bit of leeway to find cheap car cover quotes for a long-term policy in that new owner’s name. Most free insurance periods are for only one week, so if the driver hasn’t found affordable cover, he cannot register or drive that vehicle until it is covered.

As good as new cars with free insurance sounds, there are restrictions. Not all auto retailers will pay for the free cover if the car purchaser is a high-risk driver with a poor driving record or is newly licensed. Because the free cover is a short-term cover, the qualifying drivers must usually meet the carrier’s standards, which is usually a minimum age of 21 with few points and a good driving record. However, if a mature driver opts to take advantage of this offer and has an excellent driving record, that mature driver might be offered free comprehensive cover for the short time instead of third-party protection for the one-day trip home.

If you, the young driver, are in the market for a new car, don’t rush out and buy the car of your dreams because of this offer until you determine if you qualify for that free coverage and if you can afford a long-term comprehensive insurance policy in addition to the car payments themselves.

Priorities for Dealerships

Motorists of any age who have a bad driving record pose just as much risk to new cars and the public as young, newly licensed drivers do. Because the dealership is the policy holder, and the car purchaser is a named driver, the dealership holds primary financial responsibility for that free insurance. They pay the cover costs and according to the original contract, they pay the excess in case of an accident. Therefore, they are very careful about verifying the driving records of any prospective addition to the policy. If you don’t have a very good or excellent driving record with few if any penalty points on your licence, you may not get that free insurance with your new car. Dealerships are usually even more conservative in that new cars with free insurance deal than insurance providers are.

Only for a Temporary Period

If you opt to allow the dealership to provide that insurance, be aware that it is not permanent coverage. At most, temporary covers can last at most only 28 days, and your free insurance will probably run out after a week or less. Some extraordinarily generous dealerships might offer ultra-save drivers extended coverage, but there is no reliable data on extended covers lasting beyond a year, and those seem to be on only ultra-expensive vehicles with a large profit margin for the dealer.

In those instances, accident coverage will pay covered repairs during the first year you drive the new car. Once that policy period ends, you can assume the policy and transfer it into your name, paying the associated premiums, or you can shop for coverage of your own to find a cheaper price for the level of cover that is required or desired.

Where Can I Find Cars?

You might find on the Internet these new cars with free insurance deals. If you live in or near a large metropolitan area, your odds increase. When you find these terrific deals, be sure to read all you can about them, especially any restrictions noted. If none are explained or you have questions, call or email the sales department of the dealer. They can send you all the information you want and still be available for additional questions.

Determine what level of cover is provided under what conditions. If a lower-grade insurance is gifted, but you have bank financing that needs comprehensive cover, ask if you can simply pay the difference in the two policy quotes until you find your own cover, or simply compare prices on full coverage based on the make and model of the vehicle. If you pre-qualify for cover based on that pre-purchase search, you might get a discount on the price of one of the new cars with free insurance if you drive away behind the wheel of that new purchase with your own coverage in hand.

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