Minimum auto insurance requirements vary from state to state. But in every state except New Hampshire*, some type of coverage is required by law for anyone who drives on public roads. It should also be noted that there are ways to get around traditional insurance coverage in Arizona and Virginia. However, the alternative options in both of these states still require a payment or fee.
When you finance a car, auto insurance costs must be considered right along with your monthly payment and other expenses. In fact, when a lender calculates your debt to income (DTI) and payment to income (PTI) ratios, insurance costs are added in.
So, if you're buying a vehicle for the first time, you'll want to make sure that you're prepared to purchase the right policy. Basically, you'll want to get the best deal possible on the right kind of coverage for your driving needs.
Finding the Right Auto Insurance Coverage in a Sea of Options
Even if auto insurance wasn't required by law, would you really want to risk not having it? Of course, no one wants to ever have to make use of their policy, but it's good to know that it's there. For most drivers, having to pay out of pocket for accident-related damages could be financially devastating. Even minimal coverage may not be enough, depending on the incident and extent of damages.
This is why there are lots of optional types of coverage available. For example, collision and comprehensive coverage aren't required in any state (if you're financing a vehicle you must have both). But plenty of drivers choose to purchase these types of policies. Other popular coverage options include roadside assistance, towing insurance and full-glass coverage.
So, with so many insurance options available, how do you know which one(s) to buy? If you're like a lot of drivers, it will come down to what you can afford. In addition to your budget, you'll also have to think about how often you drive, where you drive and your credit rating.
The Best Auto Insurance Coverage for Your First Car
Obviously, when it comes to car insurance coverage, having too much is better than not having enough. However, you'll first need to figure out how much you can afford to spend on a policy. Keep in mind that certain drivers pay more for basic insurance than other drivers if there are risk factors involved.
For instance, those who are under the age of 25 pay higher premiums because, statistically, they're more likely to be involved in an accident. Also, except in the states that forbid it, drivers with lower credit ratings might pay more for coverage. This is due to the fact that statistics show that drivers with poor credit typically file more claims than those with good credit.
So, with these things in mind, here are some tips on how to find the best policy for your budget and needs:
- Find out what the minimum requirements are for your state.
- Don't settle for the first quote that you get from a provider. Shop around and make sure that you're getting the best price possible for the coverage you want.
- Take advantage of every available discount. Often, price breaks are given to students, those who've taken a defensive driving course and drivers with clean records. In fact, now there are devices that can be installed on your car that track your safe driving habits.
- If you have bad credit, try to take measures to improve your situation.
If you find that you're initially only able to purchase minimum coverage, this is just an incentive to be an extra cautious driver. After you've had your policy for a while, you may be able to get an upgrade. Many companies reward long-time subscribers with discounts on insurance options.
Get the Car You Need and a Chance at Better Credit
If you have bad credit and need to buy a car, Auto Credit Express can help you find financing. We can match you with a local dealership that can work with unique credit situations. In addition, once you've purchased your vehicle, you'll have an opportunity to improve your credit by making timely payments.
Our process is fast and easy, and our service is free of both charge and obligation. So, go ahead and fill out our simple and secure auto loan request to get started today.
*In New Hampshire, drivers who are convicted of certain offenses, such as driving under the influence of drugs or alcohol, are required by law to carry minimum insurance coverage.