Car insurance for first-time buyers

Whether you're moving out of your parents' house and taking your car with you or buying your first car while living on your own, you need your own car insurance policy. Buying car insurance for the first time can feel intimidating, but you can feel empowered with the right tips to follow. You have the freedom to choose your own insurance company and customize your policy to fit your needs.

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When do I need to buy car insurance for the first time?

Many first-time drivers are teenagers who are living with their parents and covered by their parents' car insurance policy. As a teenager, you probably weren't involved in selecting auto insurance coverages and limits. Once you move out permanently, you will need to purchase your own policy because your car is no longer housed at your parents' house. There are exceptions to this rule if you are a college student — learn more about car insurance for college students to see if you need your own policy.

With some insurers, you can share a car insurance policy with someone that you live with if all vehicles are housed at the same location, such as a roommate. Just know that there can be pros and cons associated with sharing a policy— learn more about adding someone to a car insurance policy to see if it's the right fit.

How to get car insurance for the first time

Now that it's time to purchase a policy, make sure your coverages, limits, and discounts cater to your situation. Here's a simple checklist with items to consider before purchasing your first car insurance policy:

Does your liability coverage match your net worth?
While your parents may have higher liability limits, you might not need limits as high as theirs. Choosing your state's minimum liability limits may save you money, but you should only do so if the minimum limits are higher than your net worth. You can figure out your net worth by adding up your bank, investment, and retirement accounts, plus equity in your home and any other property, and then subtracting any debts you have.
Is your vehicle properly protected?
If your car is financed or leased, your lender will usually require you to carry comprehensive and collision coverage. But even if your car is paid in full, comprehensive and collision can be worth carrying as they can pay to repair or replace your ride if it's damaged or stolen. If your car is paid off and worth less than a few thousand dollars, you can lower the cost of your insurance policy by eliminating comprehensive and collision. If you choose to drop physical damage coverages, make sure you can pay out of pocket for another car if something happens to your vehicle.
Are your deductibles affordable to you?
Your parents may have chosen high deductibles on their policy. While this is a good strategy to lower your policy's rate, make sure you can cover your deductible amount in case you have to file a claim. Learn more about car insurance deductibles so you can choose the right amount for your policy.
Are you maximizing all available discounts?
While insurance for drivers over 25 generally costs less than what younger or first-time drivers will pay, you should still choose an insurance company with an array of car insurance discounts to help you save. If you're a renter, you can bundle your auto policy with renters insurance and earn a multi-policy discount with Progressive in most states. If you have a roommate, some insurers will allow you to earn a multi-car discount by driving separate vehicles and sharing an auto policy. Students and teenagers can also save with student car insurance discounts.

Your first car insurance policy should strike a balance between affordability and the right amount of coverage. Choosing the cheapest car insurance policy may make sense financially but paying a little more each month can go a long way to ensure that you're properly covered.

Pro tip:

Use our car insurance calculator to help determine your coverage needs and check out more ways to lower your price for car insurance.