Are you in the market for a new vehicle? Whether you’re an experienced buyer or this is your first big purchase, you need to have a game plan. Here is some helpful advice to guide you in making an informed decision about the features you want as well as the insurance you will need.
Whether you’re buying a new or used vehicle, your research should start before you inspect a vehicle in person. We recommend utilizing the many online vehicle buying tools, customer reviews and consumer reports available. A couple of suggestions are Autos.ca and ConsumerReports.org. This research will help you narrow down the type of vehicles you are considering and what their fair market values are.
At this point, it doesn’t hurt to also speak to a BrokerLink broker to discuss insurance quotes for your short listed vehicles. By having a rough estimate of how much you can expect to pay for your auto insurance, you’ll be in a better position to evaluate how potential vehicles fit your budget.
Things to consider
- When choosing a vehicle, make note of whether the vehicle’s parts are domestic or from overseas. If a vehicle has parts that aren’t commonly available in Canada or the U.S, your insurance premium could be higher, since the cost of importing replacement parts will be significantly higher.
- Which vehicles fit your lifestyle? Bring strollers, golf clubs, hockey equipment and anything else you expect to transport in your car on a regular basis during your test drive. Make sure your vehicle is suited to your lifestyle.
- It’s important to know what your budget is and to stay firm. Make note of what your insurance payments and any financing costs will be so you are prepared to handle upsells from the dealer. Features such as extended warranty, scheduled maintenance, undercoating and leather protection are often offered after a customer has agreed to purchase a vehicle.
- It is important to keep in mind that additional features can add up tremendously and we recommend you consider the cost versus benefit when evaluating extra features.
Vehicles begin to depreciate the moment they’re driven away from their dealerships. Therefore, many insurance companies offer a waiver depreciation option, which can help protect the value of your new vehicle for a limited period of time. Under this coverage, if your vehicle is written off in an accident, you will receive the lesser of either the Manufactured Suggested Retail Price or what you originally paid if you purchased your vehicle at a discounted price (i.e. sale, employee discount, etc).
Waiver depreciation options are not applicable to used vehicles and there are fees associated with these services. Previous demo vehicles with less than 5,000 kilometres may be eligible.
Before you drive home
Before you drive your new vehicle home, it’s essential to have insurance coverage. Although the Newly Acquired Vehicle clause in many insurance policies states drivers have 14 days to insure their new purchases, this clause can be misleading and should only be relied upon as a last resort. Despite the implication that drivers are granted a 14 day grace period, the Newly Acquired Vehicle clause also dictates drivers must attempt to set up their new insurance policies as soon as reasonably possible.
The clause is in place to allow you to drive your new vehicle home even if you were unable to get in touch with your insurance provider to insure your new purchase. However, you are still expected to contact your insurer as soon as you are able.
If you must utilize the Newly Acquired Vehicle clause, your insurance coverage will be subject to the limits on your existing policy – which may not be sufficient for your new vehicle.
For example, if you owned two vehicles prior to your new purchase, and one of these vehicles was “parked” with no collision or comprehensive coverage, this same coverage would be the insurance that extends to your new vehicle during the 14 day grace period under the Newly Acquired Vehicle clause. Once again, we highly recommend not relying on this clause and contacting your BrokerLink broker before you drive your new vehicle home.
Purchasing a new vehicle can be an exciting time. By putting together a game plan, including budget and insurance considerations, you can make an informed decision. Contact a BrokerLink broker to help guide you through this process, so you can find the right vehicle to take you to new adventures that lie ahead.