Myth #1 - Don't assume your insurance company won't care about what you buy. The fact is, is that the companies do care, and the cheap auto insurance you were carrying on that old pickup with liability only isn't going to be so cheap anymore when you add that new hotrod with full coverages to your policy.
When insurance companies charge a premium for a vehicle, they look at several factors including how many miles a day or year it is driven, who is driving it, how big or small of a physical damage deductible the owner is willing to carry, the driver's accident history, performance and crash statistics for the vehicle and it's cost new.
One of the problems people often face with buying a new car is the insurance sticker-shock after the vehicle is purchased, or even worse to find out the vehicle isn't eligible for coverage.
So what's the remedy for buyer's regret? Just a little pre-planning before you sign on the line. It's good to have a few possible vehicle selections in mind before you contact your agent for an insurance quote (don't wait until you're at the dealership to do this). That way if you find out if your first choice isn't going to be workable, maybe your second choice will be.
Myth #2 - You won't have to report any vehicle changes to your insurance company, coverage will just be automatically extended. Although a buying a car with an auto loan requires you to contact your insurance agent or company to add a lienholder, many people still either assume their new vehicle is automatically covered or simply forget to report it.
Although many auto insurance companies will give you an automatic 30 day grace period to report the acquisition of a new vehicle, it's best to make a point of contacting them the day of your purchase. To fail to do so could mean that auto insurance that was so cheap to begin with is no longer worth much when you have to deplete your savings account to pay for uncovered damages in the event of an accident.
Myth #3 - Just because your insurance company has been giving you a great auto insurance rate on your current vehicle, don't assume they will be just as competitive on your new vehicle. Different companies charge different rates on different vehicles depending on the variables they place the most weight on.
To use an example here, say if you are a family of three with only two vehicles. If that third family member is a young driver, they may have only been rated as a part-time operator. With the addition of a third vehicle, most companies will force a young driver to be classified as a principle operator (three cars for three drivers), which can cause insurance rates to skyrocket. Where your current company may have excelled with part-time young driver rates, your cheap auto insurance premium may not be so cheap anymore once your young driver is re-rated as a principle operator.
Whether or not you fit this scenario, it never hurts to shop around a little for the most competitive auto insurance quote before adding a new vehicle. If you're happy with your current insurer because of great accessibility, responsive claims handling, financial stability, etc, then maybe you won't care. But if you find out you could find even cheaper auto insurance by switiching companies, then maybe it's time for a change.
