New Car Replacement™ Insurance

If your new car is stolen or totaled in the first year, you'll get the money for a brand-new car, not just the depreciated value.1

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What is New Car Replacement™?

Getting a new car is exciting! But you probably know it starts losing value the minute you start driving it. Most vehicles lose up to 10% of their purchase value within the first few months alone. New Car Replacement is extra protection against depreciation, specifically for new vehicles.

In the case of theft or an accident that totals your vehicle within the first year of ownership, or before you reach 15,000 miles, regular auto insurance will pay you for the value of your vehicle at the time of an accident (its depreciated value). New Car Replacement will pay you the amount it will cost to buy a brand-new vehicle with the same make and model. No need to worry about how much your vehicle has depreciated.

Brand new car with a bow on the hood.

Frequently asked questions about New Car Replacement coverage

Who is New Car Replacement right for?

New Car Replacement coverage is recommended for customers insuring vehicles that are:
  • Less than one year old
  • Have less than 15,000 miles
  • Not a lease (includes motorcycles)
  • Have comprehensive and collision coverage
  • Have had no previous owners

What are the benefits of New Car Replacement?

  • Protect your recent vehicle purchase through the first year of ownership.
  • Get money for a replacement car that's the same model year as your totaled car.
  • Don't worry about replacing your totaled car with an older model of lesser value.
  • Avoid the financial loss associated with owing more money on your car than it is worth.

What is the difference between Gap Coverage and New Car Replacement?

Gap coverage is financial protection when you owe more on your loan than your vehicle is worth. If your car is totaled or stolen, and its value is lower than the amount remaining on your loan, Gap Coverage will cover the remaining amount you owe.2 It doesn't pay for a new car, just the “gap” between what you owe and what your vehicle is worth.

New Car Replacement is financial protection for you regardless of your ownership status (whether you have a loan or have fully paid off your vehicle). So, if you owe money on a loan for your vehicle, you'll continue to make your payments with no changes to the amount you owe, but you'll get a brand-new vehicle without paying anything extra for it.

How does New Car Replacement coverage work?

Let's say you purchased a brand-new vehicle for $30,000 and added New Car Replacement coverage to your car insurance policy. You get into an accident within a few months of ownership and your vehicle is totaled. At the time of the accident, your vehicle was valued at $24,000. If the incident is covered by your car insurance policy, regular car insurance would pay you $24,000, but New Car Replacement coverage will pay you for the amount it will cost to purchase a new car with your vehicle's same make and model (minus your deductible).

That's especially helpful if you'd expect to replace your almost-new-but-totaled vehicle with a brand-new vehicle.

Do I need New Car Replacement coverage?

Although New Car Replacement coverage is optional and isn't typically required by lenders, it's extra financial protection for you that might be worth considering.

Some vehicle makes and models depreciate faster than others. If you purchase a luxury, electric, or other specialty vehicle, new car replacement coverage might be more valuable to you in the event your car is totaled within the first year of ownership.

Another thing to consider when deciding if New Car Replacement coverage is worth it is whether you'd be comfortable paying out of pocket in the event of an accident for the difference between your vehicle's depreciated value and how much it would cost to purchase a brand-new version of your vehicle - assuming you want to replace your vehicle with a new one.

New cars are exciting. If you think you'd like to replace your new vehicle with another brand-new vehicle in the event of an accident, without taking a significant financial hit, the extra cost associated with New Car Replacement coverage in the first year of ownership might be worth it for you both financially and for peace of mind.

How much does New Car Replacement coverage cost?

The cost for New Car Replacement depends on a variety of factors, including your new car's purchase price, where you live, and other considerations. To see how much it would cost to insure your new vehicle with New Car Replacement coverage, get an auto insurance quote.

What if my car is older than 1 year?

If your vehicle is 1 year or older and you want peace of mind if your vehicle is totaled, you might consider purchasing Better Car Replacement™2 coverage.

With Better Car Replacement coverage, we'll replace your vehicle with a car that is 1 model year newer and with 15,000 fewer miles than your vehicle at the time that it's totaled.

Whether you go with Better Car Replacement, or New Car Replacement, both will offer valuable auto replacement protection in the event your car is stolen or totaled.

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1Optional endorsement. Applies to a covered total loss. Your car must be less than one year old, have fewer than 15,000 miles, and have had no previous owner. Does not apply to leased vehicles or motorcycles. Subject to applicable deductible. Availability may vary by state.
2Optional coverage in some states; availability varies by state. Eligibility rules apply.