Guest post: Do I need car insurance before buying a car?

Nissan Pulsar

Looking for a new car is a labour of love and often when you find your perfect match you’ll know from the very first purr of the engine. Whether you’ve been looking for a new ride for months, or just happened to fall in love when walking past your local car showroom, you’ll still need to get the legal formalities right before you drive away.

As you know car insurance is mandatory for drivers in Australia. It helps protect you, your passengers and other motorists in the event of an accident. Without insurance you could find yourself faced with an expensive liability claim stretching into the thousands, not to mention facing criminal charges for driving uninsured.

Driving away in your new car without insurance isn’t worth the risk. If you have an existing policy for your old car, all it takes is a phone call to your insurer to transfer your vehicles. Depending on the insurance grade of your new car you may have to pay an additional fee or an administration charge, but it means you’ll be able to drive away from the showroom that very same day.

Don’t accept the first quote! It’s incredible how much the cost of your insurance can differ between insurance companies. You could save hundreds of dollars just by shopping around. With the increasing number of comparison sites on the market you can retrieve multiple quotes with the click of a button, making it quick and easy to cover all your bases to ensure you get the best deal.

Get a quote in advance! If you know what kind of car you’re after, some insurers will let you obtain a quote by inputting the make and model without a registration. While you’ll be expected to input registration details before the policy is finalised it allows you to get an idea of the cost of insurance for that particular vehicle. This method can also save you from disappointment. While you may love the look of a sporty 3 little petrol, once you’ve seen the cost of the insurance you might opt for something a little more sensible!

Fully comprehensive or third party? It’s easy to be tempted to go for the lowest price quote you find, but sometimes paying extra for increased peace of mind is worth it. A fully comprehensive car insurance policy will cover you for full repairs of your vehicle regardless of fault, while if you’ve been deemed responsible a third party will only cover the repairs of the other vehicle. This could mean you’re left with a large unexpected bill to repair your car to a roadworthy standard.

If you’re buying your new car on credit them fully comprehensive insurance is mandatory to protect the lenders interest in the vehicle. Similarly if your vehicle is over a certain value many insurance companies will only provide comprehensive cover. In some instances third party quotes have been known to be higher than fully comprehensive ones, as insurers deem conscientious drivers who care about their vehicles to be a lower risk!

So do I need car insurance before driving away? Yes, before you leave the dealership it’s vital you take out an insurance policy. Many car dealers won’t mind you leaving the vehicle with them for a day or two while you get your insurance sorted, so don’t be afraid to ask. Shopping around for the right policy makes much more sense than buying the first thing you see, so consider your options wisely and opt for as high a level of cover as you can afford.