Is "full coverage" a real type of insurance I can buy?

Technically, no . "Full coverage" is just a common term people use for a policy that includes liability, collision and comprehensive coverage.

Does gap insurance cover late loan payments or extras like extended warranties?

No. Gap insurance only covers the difference between your car's actual cash value and your remaining loan balance.

If my new car is totaled, do I still have to pay my deductible?

Yes. Your deductible applies to all collision and comprehensive claims.

How soon do I need insurance on my new car?

You need insurance before you drive off the lot . Most dealerships won't let you leave without proof of coverage. If you already have a policy, check with your insurer. Many provide a grace period (typically 7–30 days) to add a new car.

Why is new car insurance more expensive than used car insurance?

New cars have higher values and repair costs than used cars , which means insurers pay more if your car is damaged or totaled. Advanced technology like sensors and cameras also costs more to fix or replace than older, simpler parts.

Can I drive a new car home from the dealership without insurance?

No, in almost every state, you need proof of insurance before driving off the lot. If you already have a car insurance policy, your existing coverage may temporarily extend to a new vehicle for a grace period (usually 7 to 30 days), but you should confirm this with your insurer before buying. If you don’t have an existing policy, you’ll need to purchase one.

Do I need full coverage on a new car I own outright?

It’s not legally required if you own the car outright, but it’s strongly recommended. Without collision and comprehensive coverage, you’d have to pay out of pocket to repair or replace your car after an accident, theft, or weather damage. Given that the average new car costs nearly $49,000, that’s a significant financial risk.

Does my credit score affect new car insurance rates?

In most states, yes. Insurers use a credit-based insurance score to help set rates. A higher credit score generally leads to lower premiums. A few states, including California, Hawaii, and Massachusetts, prohibit insurers from using credit scores in pricing.

New Car Insurance: What You Need to Know

When people talk about “new car insurance” they’re not referring to a special type of policy. It’s the combination of coverages you buy for a brand-new car. For most, this means purchasing a full coverage policy that includes liability insurance, plus collision and comprehensive coverage. If you’re financing or leasing, your lender will almost always require full coverage.

Even if you own the car outright, full coverage is strongly recommended to protect your car from any damage. That way you don’t have to pay out of pocket if your car is damaged or totaled, since a new car can be pricey to replace. According to data from Kelley Blue Book, new vehicles cost an average of $48,841 in 2025.

Jerry has helped 8,043 drivers buy insurance for their new car in the past year, helping them get on the road fully protected. Here’s what to know about coverage for your new car.

Jerry pulls up to 20 quotes from top rated carriers.

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Do I need insurance on my new car?

Yes, your new car should be insured. It’s illegal to drive without car insurance, but it’s also wise to protect your new purchase.

Here’s different coverage types and when you need them.

Coverage type	What it covers	Do you need it?
Liability	Others’ medical bills and property damage when you’re at fault.	Required by law, except in New Hampshire.
Collision	Your car repairs after hitting another car or object.	Required if financing/leasing. Recommended for new cars.
Comprehensive	Damage to your car from theft, vandalism, weather and accidents with animals.	Required if financing/leasing. Recommended for new cars.
Uninsured/underinsured motorist	Your costs when hit by uninsured or underinsured drivers.	Required in some states. Strongly recommended everywhere.
Personal injury protection (PIP)	Medical bills, lost wages, childcare after an accident.	Required in no-fault states.
Medical payments (MedPay)	Medical expenses after an accident.	Optional in most states, but may be worthwhile if you don’t have health insurance.

Liability

What it covers

Others’ medical bills and property damage when you’re at fault.

Do you need it?

Required by law, except in New Hampshire.

Collision

What it covers

Your car repairs after hitting another car or object.

Do you need it?

Required if financing/leasing. Recommended for new cars.

Comprehensive

What it covers

Damage to your car from theft, vandalism, weather and accidents with animals.

Do you need it?

Required if financing/leasing. Recommended for new cars.

Uninsured/underinsured motorist

What it covers

Your costs when hit by uninsured or underinsured drivers.

Do you need it?

Required in some states. Strongly recommended everywhere.

Personal injury protection (PIP)

What it covers

Medical bills, lost wages, childcare after an accident.

Do you need it?

Required in no-fault states.

Medical payments (MedPay)

What it covers

Medical expenses after an accident.

Do you need it?

Optional in most states, but may be worthwhile if you don’t have health insurance.

Jerry recommends: Get higher liability limits than what your state requires, and consider limits of at least 100/300/100. One accident with injuries can cost over $160,000, according to the National Safety Council.

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How much does new car insurance cost?

Car insurance for a new car costs between $180 to $406 per month according to Jerry’s customer data.

For context, the national average cost of full coverage car insurance in 2025 was about $2,144 per year, according to the Insurance Information Institute. Factors that affect new car insurance costs include:

🚗 Your car’s value and technology. More expensive cars, like electric vehicles, with advanced features like sensors, cameras and batteries cost more to repair, which increases insurance costs.

🛡️ Coverage choices. Higher limits and lower deductibles increase your policy costs.

📍 Location and driving habits. Your ZIP code, annual mileage, commute length and parking situation all affect how much you pay.

📋 Driving record. Tickets, accidents and gaps in your insurance history can raise your rates.

💵 Available discounts. New-car discounts, safe-driver programs, bundling home and auto or paying your premium upfront can lower your costs.

Average new car insurance costs by vehicle type

Insurance costs vary significantly depending on the type of new car you buy. Here are typical monthly ranges based on Jerry’s customer data.

Vehicle type	Avg. monthly cost

Vehicle type	Avg. monthly cost

Sedan (e.g., Toyota Camry)	$167 to $366
SUV/Crossover (e.g., Honda CR-V)	$142 to $311
Pickup truck (e.g., Ford F-150)	$150 to $318
Electric vehicle (e.g., Tesla Model Y)	$293 to $614
Luxury vehicle (e.g., BMW, Mercedes)	$224 to $506

Last Updated April 4, 2026

Jerry recommends: Compare car insurance quotes in the Jerry app before you get to the dealership. That way you’ll have your new policy ready and can quickly drive off the lot once you’ve purchased your new car.

How to get affordable insurance for a new car

New cars are more expensive to insure, but there are several ways to keep your costs manageable.

Compare quotes from multiple carriers. Rates for the same car and driver can differ by hundreds of dollars between companies. Getting at least three to five quotes helps you find the best deal, and Jerry can help you compare side-by-side quotes from up to 100 insurers.

Raise your deductible. Increasing your deductible (the amount you pay before insurance covers the rest) from $500 to $1,000 could lower your collision and comprehensive premiums.

Ask about discounts. Many insurers offer discounts for new cars with advanced safety features like automatic emergency braking, lane departure warnings, and anti-theft systems. You may also qualify for multi-policy discounts, good driver discounts, or pay-in-full discounts.

Choose your vehicle carefully. Before buying, check how much the car will cost to insure. Compact SUVs like the Toyota RAV4 and Honda CR-V are typically among the cheapest new vehicles to insure.

Bundle your policies. Jerry customers who combine car insurance with homeowners can save up to 40%.

Get insurance for your new car with Jerry

When shopping for coverage on your new car, it’s important to compare policies from multiple companies to find the right balance of protection and cost.

Jerry partners with 100+ insurers and shows you quotes side-by-side, so you can see exactly how different coverage options and deductibles affect your premium. You can compare full coverage policies in minutes and find the right protection for your budget.

Let Jerry do the legwork. Get competitive quotes in minutes.

Gap insurance vs. new car replacement

Many drivers confuse these two coverages because they both deal with your car’s depreciation, or its loss in value over time. But they work differently.

New car replacement	What it does	Best for
New car replacement	Replaces your totaled car with a brand-new one.	Drivers who want a brand new car if theirs is totaled.

New car replacement

What it does

Replaces your totaled car with a brand-new one.

Best for

Drivers who want a brand new car if theirs is totaled.

Gap Insurance	What it does	Best for
Gap Insurance	Pays the difference between your car’s current value and what you still owe on your loan.	Drivers with low down payments or loans higher than the car’s market value.

Gap Insurance

What it does

Pays the difference between your car’s current value and what you still owe on your loan.

Best for

Drivers with low down payments or loans higher than the car’s market value.

Key takeaway: If you put little money down or bought a car that depreciates quickly, gap insurance should be your priority. If you can afford both, add new car replacement for even better protection.

Other coverages worth considering

Beyond full coverage, consider these optional add-ons to protect your new car.

🔧 Original equipment manufacturer (OEM) parts coverage:
Ensures that mechanics use original manufacturer parts instead of generic aftermarket ones, which can affect your car’s resale value and its safety.

🚙 Rental car reimbursement:
Provides a rental car while yours is being repaired for a covered claim.

🛣️ Roadside assistance:
Covers towing, jump-starts, flat tire changes and lockout services when you break down.

How often should you shop for new car insurance rates?

Jerry recommends comparing quotes at least once every six months, ideally at every renewal period. Your rates can change based on factors like your driving record and market conditions. If you buy a new car insurance policy using Jerry, we can alert you when it’s time to reshop for a new policy.

This is especially important in the first few years of owning a new car. As your car depreciates, your coverage needs may change. You might be able to increase your deductible or adjust your coverage limits as your car ages, which could lower your premium.

It’s also worth re-shopping after major life changes, like moving to a new address, getting married, improving your credit score, or turning 25, when rates typically drop.

It only takes 2 minutes to sign up at Jerry.

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FAQ

Is “full coverage” a real type of insurance I can buy?

Technically, no. “Full coverage” is just a common term people use for a policy that includes liability, collision and comprehensive coverage.
Does gap insurance cover late loan payments or extras like extended warranties?

No. Gap insurance only covers the difference between your car’s actual cash value and your remaining loan balance.
If my new car is totaled, do I still have to pay my deductible?

Yes. Your deductible applies to all collision and comprehensive claims.
How soon do I need insurance on my new car?

You need insurance before you drive off the lot. Most dealerships won’t let you leave without proof of coverage. If you already have a policy, check with your insurer. Many provide a grace period (typically 7–30 days) to add a new car.
Why is new car insurance more expensive than used car insurance?

New cars have higher values and repair costs than used cars, which means insurers pay more if your car is damaged or totaled. Advanced technology like sensors and cameras also costs more to fix or replace than older, simpler parts.
How much does it cost to insure a new car per month?

According to Jerry’s customer data, new car insurance costs between between $180 to $406 per month. Your rate depends on the car you drive, where you live, your driving record, and the coverage levels you choose.
Can I drive a new car home from the dealership without insurance?

No, in almost every state, you need proof of insurance before driving off the lot. If you already have a car insurance policy, your existing coverage may temporarily extend to a new vehicle for a grace period (usually 7 to 30 days), but you should confirm this with your insurer before buying. If you don’t have an existing policy, you’ll need to purchase one.
Do I need full coverage on a new car I own outright?

It’s not legally required if you own the car outright, but it’s strongly recommended. Without collision and comprehensive coverage, you’d have to pay out of pocket to repair or replace your car after an accident, theft, or weather damage. Given that the average new car costs nearly $49,000, that’s a significant financial risk.
Does my credit score affect new car insurance rates?

In most states, yes. Insurers use a credit-based insurance score to help set rates. A higher credit score generally leads to lower premiums. A few states, including California, Hawaii, and Massachusetts, prohibit insurers from using credit scores in pricing.

Methodology

Data included in this analysis comes from policies that Jerry has quoted within the last 6 months for drivers with a clean record and that have full coverage, unless stated otherwise. Data related to violations, accidents or credit scores pull from quote data from the last 18 months. Jerry services 48 states and offers a range of insurance companies to choose from. Read Jerry’s car insurance data methodology to learn more about how we collect, verify and share real-world insurance data.

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Our experts

Ben Moore

Ben Moore is a writer and editor at Jerry and an auto insurance expert. He previously worked as a writer, editor and content strategist on NerdWallet’s auto insurance team for five years. His work has been published in The Associated Press, Washington Post, Chicago Sun-Times, MarketWatch, Nasdaq and Yahoo News. He also served as a NerdWallet spokesperson, with appearances on local broadcast television and quotes in Martha Stewart and Real Simple magazine.

Ben has an extensive background in digital marketing, working on affiliate and programmatic advertising campaigns for brands like Cabela’s, H&R Block and Sears. He holds a bachelors degree in marketing from Olivet Nazarene University.