Best Car Insurance for New Cars [2025]: Reliable Protection for Your New Wheels

After years of making do with clunkers, I bought my first true new car, a little Nissan Versa. I enjoyed all of its cool features and that delicious new car smell for all of three weeks. Then, another driver ran a red light, plowed right into me, and totaled my beautiful car.

Thankfully, I walked away unscathed, but it was still a painful lesson in the importance of having the right car insurance. With the average cost of new cars nearing $50,000, you want to make sure your vehicle is properly protected.

To keep your wheels safe without breaking your budget, do your research and get quotes from multiple companies that offer the best car insurance for new cars. I found that GEICO, Root, and Progressive are among the top companies for auto coverage.

How we evaluate products

Best car insurance for new cars

Company name	Best for	Average monthly full coverage cost	Average monthly liability-only cost
GEICO	Mechanical breakdown coverage	$142	$111
Root	Usage-based insurance	$146	$95
Progressive	Protection plans and added coverage	$171	$105
American Family	GAP insurance	$149	$74
Liberty Mutual	New car replacement	$246	$178
Data provided by Insurify

GEICO

Best for mechanical breakdown coverage

Company details

AM Best: A++ (Superior)
J.D. Power claims satisfaction: 692/1,000 (study average 697)
BBB: A+
NAIC complaints: 0.75 (Private Passenger)

GEICO is one of the few companies I evaluated that offers mechanical breakdown coverage, an optional benefit you can add to your new car policy. It pays for repairs if your car's major systems or components break down due to reasons other than normal wear and tear.

Plus, GEICO's rates are among the cheapest, and it has an extensive list of discounts that can help you further lower your car insurance premiums.

However, GEICO's claims satisfaction rating from J.D. Power is slightly below average. It also doesn't sell GAP insurance, so you'd have to purchase that coverage from the dealership or another insurance company.

Pros

Sells mechanical breakdown coverage
Cheaper-than-average rates
Extensive discount list

Cons

Slightly below-average claims satisfaction ranking from J.D. Power
Doesn't sell GAP insurance
Limited agent network

Learn more in our GEICO review.

Root

Best for usage-based insurance

Company details

AM Best: Not rated

J.D. Power claims satisfaction: Not rated

BBB: A-

NAIC complaints: 1.93 (Private Passenger)

As a new car owner, you're likely more cautious when you drive to keep your new ride safe. If so, you may benefit from signing up for usage-based insurance (UBI) through Root. This insurer bases your policy premiums on your driving habits and the number of miles you cover. Safe drivers who cover fewer-than-average miles can slash their car insurance costs.

But Root isn't available everywhere. You can't get a policy in Alaska, Hawaii, Idaho, Maine, Massachusetts, Michigan, New Hampshire, North Carolina, New Jersey, New York, Vermont, Rhode Island, South Dakota, Washington, Wyoming, or Washington, D.C. Plus, the company has a higher-than-average volume of NAIC complaints.

Pros

Significantly cheaper-than-average rates
Credit score doesn't impact rates
Offers rental car reimbursement and roadside assistance

Cons

Limited to drivers with good driving records in eligible states
Offers few discounts and add-ons
Higher-than-average volume of NAIC complaints

Learn more in our Root review.

Get Custom Quotes Today

Safe Drivers Save with Allstate®

Average Rate:

$ $$ /mo

Get rewarded with savings for having a clean driving record.

Paying too much for car insurance?

Average Rate:

$ $$ /mo

Car insurance can be so simple. And so affordable.

GEICO

The insurance savings you expect.

Average Rate:

$ $$ /mo

Enjoy personalized policies, comprehensive coverage & more.

See how much you could save today!

Average Rate:

$ $$ /mo

Drivers who switch their auto insurance and save with State Farm save $764 on average!

Progressive

Best for protection plans and added coverage

Company details

AM Best: A+ (Superior)
J.D. Power claims satisfaction: 672/1,000 (study average 697)
BBB: A+ (Accredited)
NAIC complaints: 0.97 (Private Passenger)

Besides offering the usual coverage options (like comprehensive and collision insurance), Progressive has optional coverages and add-ons that can be useful for new car owners.

It offers car loan or lease payoff insurance, which is similar to GAP insurance in that it pays for the difference between your loan or lease balance and your car's value (up to a set maximum). Plus, you can get a vehicle protection plan to protect your car's systems and components.

However, Progressive has a less-than-stellar reputation for customer satisfaction. Your rates are also partially dependent on how you purchase the coverage; some purchase methods are more expensive than others.

Pros

Sells loan/lease payoff insurance
Offers vehicle protection plans
Offers optional custom parts and equipment coverage

Cons

Below-average customer satisfaction ratings from J.D. Power
Higher rates for some policy purchase methods

Learn more in our Progressive review.

American Family

Best for GAP insurance

Company details

AM Best: A (Excellent)
J.D. Power claims satisfaction ranking: 692/1,000 (study average 697)
BBB: A+
NAIC complaints: 0.26 (Private Passenger)

GAP insurance helps pay for the difference between your remaining loan or lease balance and your car's actual cash value at the time it's declared a total loss. Not all car insurance companies sell GAP insurance, but American Family offers it as an optional coverage.

Plus, American Family has numerous discount programs that can make your auto insurance policy more affordable, such as low-mileage and autopay discounts. The insurance company also has a very low volume of NAIC customer complaints.

However, American Family only operates in 19 states, and it has a smaller agent network than major car insurers like State Farm.

Pros

Sells GAP insurance
Multiple discount programs
Offers several optional add-ons

Cons

Slightly lower-than-average claims satisfaction ranking from J.D. Power
Only available in 19 states
Small agent network

Learn more in our American Family review.

Save On Your Auto Insurance

You could save up to $600 with some companies.
Compare dozens of providers in under 5 minutes.
Fast, free, and easy way to shop for insurance.
Quickly find the perfect rate for you.

Average rate:

$ $$ /mo

Liberty Mutual

Best for new car replacement

Company details

AM Best: A (Excellent)
J.D. Power claims satisfaction: 717/1,000 (study average 697)
BBB: A-
NAIC complaints: 3.16 (Private Passenger)

As I found out, replacing a new car after an accident can be financially challenging. Despite being just a few weeks off the lot, my car had depreciated in value, so my insurance settlement wasn't enough to buy the same year, make, and model. I had to tap into my own savings to cover the additional cost to replace my car.

That's where added protection like Liberty Mutual's new car replacement would have been useful and saved me thousands. For the first year after you purchase your car, Liberty Mutual will provide funds to buy another brand-new vehicle if you were to total yours or have it stolen. This helps ensure you won't have to worry about depreciation affecting your claim payout.

However, Liberty Mutual may be more expensive than other companies for both full coverage and liability policies. It also has a significantly higher-than-average volume of complaints with the NAIC and below-average customer satisfaction ratings on some platforms.

Pros

Offers new car replacement protection
Sells GAP insurance
Strong claims satisfaction rating from J.D. Power

Cons

Higher premiums than many competitors
Significantly higher-than-average number of NAIC complaints
Below-average customer satisfaction ratings on some platforms

Learn more in our Liberty Mutual review.

What coverage types do you need for a new car?

As a new car owner, you'll likely need the following forms of auto insurance coverage.

Liability

Liability insurance is required in nearly every state to legally drive a car. Liability coverage has two components: bodily injury protection, which pays for injuries to another driver or their passengers, and property damage protection, which pays for damages to another person's vehicle or other property.

Collision

Collision insurance pays for repairs to your own vehicle if it's damaged in an accident. It's optional, but if you bought a new car with an auto loan or leased the vehicle, the lender will likely require you to have collision coverage.

Comprehensive

Comprehensive coverage pays for repairs to your own vehicle due to non-accident damages or losses, such as storm damage or vandalism. It's an optional form of coverage, but it's usually required if you financed or leased your vehicle.

GAP

I had paid cash for my new car, so I didn't have to worry about paying off an auto loan. However, if I had financed my car, I would have been in a pickle since it had depreciated in my three weeks of ownership; I would have owed more than it was worth.

GAP insurance is for this scenario. If your car is stolen or totaled, GAP insurance covers the difference between the balance owed and your car's value at the time of the incident.

Optional add-ons

A new car can be expensive, so you want to make sure your new vehicle is protected. These optional add-ons can help you keep your car in showroom condition.

New car replacement: If your car is totaled or stolen, new car replacement insurance will pay to replace your car with a new version of the same make and model rather than reimbursing you for the vehicle's depreciated value.
Mechanical breakdown: Mechanical breakdown insurance acts like a warranty. It helps pay for repairs to your car due to mechanical issues beyond normal wear and tear.
Protection plans: A protection plan can cover your car's major systems and minor dents or dings.

How to save money on new car insurance

Although new cars are usually more expensive to protect than older models, there are several ways to save money on car insurance, including:

Select the right make and model: Some cars are less expensive to insure, so think about insurance costs when choosing which car to buy. According to Insurify data, the Toyota Camry tends to be one of the cheapest cars to insure, averaging $1,879 per year for full coverage. In contrast, the Tesla Model Y has a much higher average annual full coverage premium of $3,457.
Ask about discounts: Some auto insurance companies offer new car discounts, and you may be eligible for extra savings thanks to your new car's safety features.
Sign up for UBI: If you work from home, have a short commute, or are a stay-at-home parent, you might drive fewer miles than most drivers. If so, you can benefit from UBI or pay-per-mile policies. UBI policies base your premiums on how often you drive and your driving habits while pay-per-mile policies are based solely on how many miles you cover.
Shop around: As you saw in the chart above, car insurance costs can vary significantly between companies. Shopping around and getting multiple car insurance quotes will help you find the most affordable coverage.

FAQs

How much does insurance cost for a new car?

On average, new car owners pay $3,048 per year for full coverage, a higher rate than the average premium for all vehicles.

Is car insurance cheaper for newer cars?

In general, new cars are more expensive to insure than older models because of their higher sticker prices and values. However, you may qualify for discounts due to the new car's safety features.

Which insurance company is best for new car owners?

No one company is best for all new car owners, but I found that GEICO and Root typically have the lowest rates. Depending on your needs, another company like Liberty Mutual or Progressive, which offers additional features, may also be a good option.

Smart Drivers, Smarter Savings

Ohio: Say Goodbye to High Auto Insurance Rates if You Live in These Zip Codes

See if you qualify for a lower rate in less than 2 minutes

Start Saving Arrow right icon

By clicking the button above, I understand and agree that this site uses site visit recording technology (provided by Trusted Form, Jornaya, and Microsoft Clarity) Privacy Policy

Bottom line

A new car is a big purchase. Before you start adjusting the seat and steering wheel settings, make sure you have the right car insurance policy in place.

Depending on the amount paid for the car, its value, and your comfort with risk, you may need a full coverage policy that includes liability, collision, and comprehensive insurance as well as add-ons such as GAP coverage and new car replacement protection.

Because rates differ between companies, get quotes from several providers. Our picks for the best car insurance companies are an excellent starting point.

Save On Your Auto Insurance