How do I insure a first-time car purchase?

If you're shopping for first-time car insurance, find appropriate coverage on top of your state's minimum requirements. Compare quotes online to save up to 20% on car insurance rates.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 18, 2020

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Here's what you need to know...

  • The first thing you need to decide is which type of coverage you desire.
  • Choose a vehicle that is appropriate for your situation.
  • Choose coverage from a reputable company that offers a good rate.

Buying insurance for a first-time car purchase doesn’t have to be a nerve-wracking experience. It does take some planning, though, to make sure that you get the right coverage at the best possible price.

Compare online car insurance rates with the no cost quote tool on this page!

Before you can start shopping for car insurance coverage, you need to familiarize yourself with the different types of insurance available. Review the options and decide what you really need.

Types of Car Insurance Coverage

You be required by your state to buy liability coverage, which pays for medical bills and expenses incurred by the occupants of the other vehicle after an accident. It also pays for damage to property, including the cost of repairing the other driver’s vehicle.

If you are financing your car, you will probably be required to put full insurance coverage in place since the lender wants to protect its interests. In addition to liability insurance, which is required by law, you will also need to buy collision and comprehensive coverage.

Collision insurance pays for the cost of repairing your vehicle after an accident after you have paid your policy deductible. If your car is totaled in the accident, the insurance company will write a check for the cash value of your vehicle, less your deductible.

Comprehensive coverage pays out when your car is damaged or destroyed by a cause other than a collision. The comprehensive part of a policy will pay for the repair of a vehicle if the loss is caused by:

  • wind
  • hail
  • flooding
  • fire
  • an act of vandalism

Another option available to customers who get financing for a car purchase is to buy GAP insurance. This can be added to an insurance policy and pays out the difference between the cash value of the car and the amount owed on it.

It saves you from having to make payments on a car that is no longer drivable, and is worth considering since vehicles tend to depreciate quickly.

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Choose the Right Vehicle

You can go to a car dealer and look at different models before you have insurance in place. Take your time to figure out which one will best suit your needs and your budget. Talk to the sales representative about pricing and financing options.

Checking out different vehicles by going online or to your local library to find information about a model’s safety record is a good idea. You should also consider whether a particular model year is prone to having problems that mean they need to be repaired often.

Shop Around for Car Insurance

Once you have narrowed down your search to a few different models for your car, the next step is to shop around for your car insurance coverage.

Every company uses its own criteria to evaluate an applicant’s level of risk to insure. For that reason, rates can vary greatly between insurance providers for the same type and level of coverage.

A person who is buying car insurance for the first time does not have a long-term relationship established with a car insurance company and may not have several years of driving experience under his or her belt.

The best way to avoid paying too much for car insurance coverage is to get quotes from several companies.

You have the option of going online to visit different car insurance websites to do so, which has the advantage of providing you with information about the companies themselves.

The insurance company you choose should be one that has been in business for some time and has a good level of financial resources so that it can pay out on any claim you have to make against your policy.

Consider looking at independent financial ratings of insurance companies before making a decision.

Getting Car Insurance Quotes

Another convenient option for people who are shopping for car insurance coverage is to use the tool on this page that provides quotes from several insurance companies. This is a much faster way to find out how much coverage from different companies will cost.

If you decide to go online to shop for car insurance coverage, be sure that you are asking for quotes for the same level of protection and deductible from each company. That way, you are comparing apples to apples when you review the quotes received.

If you break down the process involved to insure a first-time car purchase, it will be less overwhelming for you. Once you have everything in place, you can focus on how good it will feel to drive your new car!

Input your zip code to get no hassle car insurance quotes today!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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