Replacing your vehicle can be a fun and bittersweet experience.

On the one hand you are going to be buying a new automobile to upgrade on the beater you have been driving around. Or, perhap you are trying to follow the Dave Ramey’s debt snowball program, and are downgrading on purpose to a quality used car your can comfortably afford.

On the other hand you have the stress of trying to get the best deal on car prices, while also deciding on the make, model and features you need, plus the hassle of unloading your existing vehicle without losing too much on a trade-in.

Of course, whichever car you decide to purchase, you will be required by Indiana BMV and Michigan DMV to carry at least minimum auto insurance coverage.

Two of the most important types of auto insurance are liability and comprehensive coverage. [Note: if you follow the link to each term, you will find other articles from Mahar Insurance that explain what they mean.]

Regardless, of the type of vehicle you purchase – new, used, or jalopy. Insurance can be quite pricey. 

According to the 2015 AAA’s annual Your Driving Costs study, you will pay an average of $1,115 per year for auto insurance coverage on an average sedan.

Naturally, this price will fluctuate based on several variables such as, your driving record, the type of car(s) you drive, and even the location where the primary driver lives.

For example – our web marketing specialist, Rob Rohena lives in Nappanee, Indiana. For a 4/3 house and a van and a cars, thus qualifying for a multi-line discount — he averages  $289 per quarter. If he lived in Michigan to rate would be closer to $347 per quarter.

The key is to make certain you are getting the best value for the right amount of coverage, which means you need to work with an independent insurance agency — like Mahar Insurance of Dowagaic, Michigan. 

In fact, here is a non-biased quote from Financial Expert  — Dave Ramey’s website to drive the point home:

… if you’re looking to save hundreds, even thousands, on your insurance costs, consider Dave’s number-one tip: Purchase your coverage through an independent insurance agent, which is an agent who represents several insurance companies instead of working for just one carrier.

Dave Ramey, The Number-One Money-Saving Tip For Insurance. August 24, 2012. 

Now back to finding a car ...

While here at Mahar Insurance, we can’t really help you become a master negotiator when it comes to buying the right car at the right price, we can give you some things to consider when you’re looking around the lot or scroll through inventory of vehicles online.

Especially, when you are trying to answer the age-old question of “new or used?”.

Read on with an open mind, and you might just come to a different decision the next time you’re on the car lot, or shopping for a cheap car online.

Things To Consider When Buying A New Car

Ah, that new-car smell. It’s a bit of a cliché, but it’s one of the things that people love about climbing into a brand-new car. — Sort of like getting new carpet for your home. In fact, Car Freshener Corporation lists “New Car Scent” as one of its best sellers. 

New Car Scent = Best Auto Insurance Company Michigan

And while they make air fresheners that supposedly give you that same smell for your used car, it just doesn’t seem the same, does it? Still, there are other benefits to buying new — and, of course, there are drawbacks as well.

  • PRO — maintenance: Some manufacturers offer free scheduled maintenance for a set period of time after you buy the car, and you likely won’t need a new battery, tires, etc., for several years after your purchase.
  • PRO — peace of mind: Your new car may have a warranty for up to 10 years, and also is covered by “lemon laws” that could allow for a replacement or refund if the car has serious defects.
  • CON — upfront cost: Depending on the make and model, buying a new car is almost always more expensive (at least in terms of the purchase price) than a used car.
  • CON — insurance cost: Bear in mind that certain makes and models can result in higher insurance costs for you, so feel free to check in with us before you buy.

Other things to reconsider when buying a new automobile:

It’s also worth noting that if you purchase a new car in its first model year (meaning it’s a new model for the automaker), there won’t be many user reviews available, and data on reliability and repairs will be limited.

In addition, sometimes newly introduced cars have some kinks that generally are ironed out by the second and third model years.

These aren’t necessarily serious issues, and the warranty should cover them, but in some instances, you and your car could be headed to the shop more than you’d like.

Things To Consider When Buying A Used Car

Okay, so you do not care about the new-car smell? You are simply looking to save some money on your purchase?

If so, then purchasing a used quality car might be right option for you.

Just remember that while you a looking to save money, you do not want cut-rate insurance. You want great auto insurance coverage at affordable insurance prices. Here’s another Dave Ramey tip related to this discussion.

 One place where you don’t want to skimp on car insurance is your liability coverage. Liability covers property damage and medical bills if you’re at fault in a car accident. It’s also one of the best deals in the insurance world, so make sure your policy includes at least $500,000 in liability coverage.

Dave Ramey, How Much Car Insurance Do You Really Need? December 7, 2013.

There are many advantages to buying used, but you will want to be a little more careful. After all, it’s hard to know exactly how well the previous owner treated the car.

As with all things in life you can limit your risk with a little bit of work.

  • PRO — cost: New cars depreciate quickly after they’re purchased. By buying used, you’re letting someone else take that financial hit over the first few years of the life of the car.
  • PRO/CON — reliability: Buying a used car is less of a gamble than it used to be, particularly with the advent of “certified pre-owned” programs many automakers now offer.

However, used cars generally don’t carry the same warranties as new cars, even though the original manufacturer’s warranty is usually transferable to a second owner.

  • CON — maintenance: While a used car theoretically shouldn’t need more frequent maintenance than a new car, you’ll likely need to replace things like tires, headlights, etc., earlier. And scheduled maintenance probably isn’t covered by the automaker.
  • PRO/CON — history: You’ll need to check the car’s title history to make sure it has not been in a serious accident or salvaged. Ask the dealership to provide this information, usually from Carfax.

Of course, whichever car you purchase, the important thing is that it’s a good fit for you. If you have any questions related to your current or future auto insurance policy, give Mahar Insurance a call. If you are located outside our coverage area of Michiana, Indiana, and Illinois, or simply want a second opinion, we recommend you check-out Dave Rasmey’s ELP’s.

 Have fun shopping for your next car /a better auto insurance company — and we’ll see you on the road!

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