How Does Farmers New Car Replacement Work?

Want to get reimbursed for the price of a brand-new car if yours is totaled? Here’s how Farmers’ new car replacement works.
Written by Bonnie Stinson
Reviewed by Bellina Gaskey
If you want to protect your new vehicle (and your pocketbook), you’ll love Farmers new car replacement insurance. If your new car is eligible, you could be reimbursed for the value of a brand-new car if yours gets totaled.
  • New car replacement coverage is an add-on coverage offered by Farmers that reimburses you for the price of a brand-new car if your car is totaled soon after buying it.
  • You must already have collision and comprehensive coverage to get new car replacement insurance.
  • Eligibility usually extends to models less than two model years old with <24,000 miles.

What is Farmers new car replacement insurance?

If you have a
Farmers car insurance
policy, you can get new car replacement insurance. It will cover the cost to replace your totaled vehicle with a new one of the same make and model in the event of a total loss.
This is only available as an add-on to policyholders who already have
full coverage
with Farmers, which includes
collision coverage
comprehensive insurance
Only vehicles that are still within their first two model years and 24,000 miles of life are eligible.
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How does Farmers new car replacement insurance work?

New car replacement insurance is only available for a specific time window. Usually, this auto insurance coverage must be purchased shortly after or at the time of the new vehicle purchase (check with your agent for specifics). 
Let’s say that your insured car gets totaled in a covered accident tomorrow. The car’s price tag was $50,000 when you bought it new last year—but today, the
actual cash value (ACV)
of your vehicle is closer to $45,000 due to depreciation. 
You file an insurance claim after the incident. After totaling the car, your Farmers new car replacement insurance policy will kick in to reimburse you for the cost of a brand-new car of the same make and model. 
Without new car replacement, you would only be reimbursed for the ACV of the vehicle ($45,000) minus your deductible. Then, you’d have to pay out-of-pocket to buy a new car.
Be aware that you may not be able to pair Farmers’ new car replacement coverage with
gap insurance
. You should talk to your Farmers agent about your options if you’re looking for gap insurance.

How much does Farmers new car replacement coverage cost?

Farmers customers can expect new car replacement coverage to cost about 5% of their premium.
The national average annual cost of full-coverage car insurance is about $2,000. So if you’re the average driver, then new car replacement coverage may cost approximately $100 per year, or just under $10 a month.

How can I keep my Farmers insurance costs low?

Insurance rates depend on your personal driving record, your zip code, and other factors specific to the provider. 
You can always expect to pay more for full-coverage than basic liability, but the type of coverage and the insurance products you select will definitely impact your rate.
Auto insurance companies also keep their own unique lists of discounts. For instance, Farmers,
State Farm
, and
all offer safe driver discounts and other perks like good student discounts.
You can also bundle your homeowners, renters, and/or life insurance with your Farmers car insurance to lower your overall insurance cost.

Is Farmers new car replacement insurance worth it?

New car replacement insurance coverage protects your vehicle—and your bank account—from depreciation, which makes it very worthwhile. 
A new car can lose up to 10% of its value as soon as it’s driven off the lot. In the first 12 months, a new car’s value could depreciate up to 20%.
If you get into an accident and total your car, the claims payout from the insurance company will be far less than the purchase price—unless you have new car replacement insurance.
Ultimately, this coverage does cost extra. But new car replacement coverage can provide worthwhile protection for new cars that would easily justify the cost in the event of a total loss.

What other coverage options from Farmers are good for new cars?

Here are a few Farmers auto insurance options that you should consider. (Remember that almost every state requires
basic bodily injury and property liability coverage
  • Collision: This coverage gives you protection in the event of a collision-related incident, like a car accident or a crash into a stationary object.
  • Comprehensive: This coverage gives you protection against non-collision incidents, like falling tree branches, theft, and vandalism.
  • Rental reimbursement
    : This coverage will pay for temporary transportation after a covered accident if your vehicle has to go into the shop for repairs. This may also be called loss of use coverage.
  • Accident forgiveness
    : This coverage will forgive one at-fault accident for every three years you go accident-free.
  • Roadside assistance
    : Enjoy towing and labor coverage for unpredictable events like running out of gas, locking yourself out, or getting stuck in a ditch.
Uninsured/underinsured motorist coverage
is always a wise investment, especially if you live in a state with a high percentage of uninsured drivers like Mississippi, Michigan, or Tennessee.
Before you buy, make sure to get car insurance quotes from multiple companies. It’s the only way to find the lowest rate for your needs. 
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The New Car Pledge ® is Farmers’ guarantee for new vehicles. It’s a coverage you can add to your policy that allows you to get a replacement vehicle of the same make and model, so long as the vehicle has less than 24,000 miles and is less than two model years old.
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