3 Tips You Need to Know Before Purchasing a Car

In the market for a new vehicle?

This can be an exciting, albeit overwhelming, time for any buyer. But as you hunt down the perfect make and model to fit your needs, be sure to keep in mind what goes into registering, financing, and insuring your new ride.

In this guide we’ve compiled the top tips our team at Berry Insurance recommends to drivers looking to purchase a new vehicle.

Key takeaways:

• Financing cars through personal banks instead of the dealership could cause delays while waiting for insurance documents to be approved and provided.
• When using temporary plates, you only have 10 days to use the temporary registration before the vehicle must be titled and registered in Massachusetts
• Be aware of how auto insurance rates will vary drastically depending on the make, model, year, and safety features of the vehicle.

Table of contents:

• Financing cars through personal banks instead of dealerships could cause delays
• What to know about temporary plates when purchasing vehicles out of state
• Be aware of how vehicles affect the cost of auto insurance

Tip 1: Financing cars through personal banks instead of dealerships could cause delays

If you are looking to purchase a new vehicle without paying for it outright, financing the car may be the best option for you. However, if you choose to finance your new car through your personal bank as opposed to the dealership where you are purchasing the vehicle, it may delay the timing of obtaining the vehicle.

Typically when choosing to finance through a personal bank, they will require insurance documents in order to close on the loan. However, once you reach out to your insurance agent for these documents, they may need to get approval from the insurance carrier before the agency can issue the insurance documents.

This is a common occurrence that our team at Berry Insurance runs into, which can usually slow down the purchasing process as agents await approval to issue the required documents. Once we get approval from the carrier, we can send the proper documents to the bank, who will then schedule the loan closing with you.

While using a personal bank when financing can be a good option, especially if they offer a better deal when compared to dealerships, buyers should be aware that doing so could stall the car buying process.

Tip 2: What to know about temporary plates when purchasing vehicles out of state

If you plan to purchase a vehicle from a seller outside of Massachusetts, then you will need to know the rules surrounding temporary license plates and the documentation needed. Massachusetts law allows drivers to utilize temporary out-of-state plates for only 10 days from the date of purchase, regardless of how long the temporary registration is valid for.

The vehicle must be titled and registered in Massachusetts within those 10 days. After the 10-day period, the customer can no longer legally operate the vehicle using the temporary registration.

If you continue to drive using temporary registration, you could experience citations, impoundment, fines, court costs, and even surcharges.

Tip 3: Be aware of how vehicles affect the cost of auto insurance

While it is easy to get caught up with buying the car with all the best features or monthly loan cost, don’t forget about the vehicle will impact the cost of auto insurance

Every vehicle has an assigned rating factor that insurers will look at. This factor is due to its average cost or repair, provided safety features, claims history, availability of parts, and more.

The year, make, and model of the vehicle will all affect the cost of auto insurance. So, brand new or higher-end vehicles will typically be more expensive to repair or replace. For example, many Audi or BMWs are usually rated higher due to availability and cost of parts, as opposed to a more common model like a Toyota Camry or Honda Accord. Similarly, buying vintage or classic cars can be more expensive and actually require their own specially tailored insurance policy.

Looking to save money? Be sure to prioritize a vehicle with safety features like airbags, automatic seat belts, alarms, LoJack, or OnStar that can help to reduce the overall cost of your insurance. For additional ways to save, check out this list: 13 Ways to Save On Your Auto Insurance.

The additional cost of a new vehicle:

It can be important for any buyer to be aware of the additional costs that will come with your new vehicle, this can include:

• Sales Tax: 6.25% of the vehicle’s purchase price or current market value (trade-ins reduce the taxable amount).
• Title Fee: $75 for a certificate of title.
• Registration Fee: $60 basic registration fee (varies by plate type).
• Inspection Fee: $35 for the required safety and emissions inspection.
• Local Excise Tax: An annual local excise tax is billed by your city or town (approx. $25 per $1,000 of the vehicle's value)

Setting yourself up for success

At Berry Insurance, we know how daunting the car buying process can seem. But with these tips directly from our team of experts, you can hopefully have a successful car buying and insurance experience.

Thinking of leasing a vehicle instead? Then read up on the pros and cons of buying versus leasing a car, as well as how it could affect your insurance.

Need auto coverage for a new vehicle? Then check out this step-by-step guide: How to Buy Car Insurance.