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Laura Berry

Former Insurance Agent

Former Insurance Agent

Joshua Adamson

Joshua is a copywriter at Obrella who for more than 10 years has been creating content about insurance, health care, and more. He helps companies explain complex insurance subjects in simple ways so that customers can make smart buying decisions. He spends way too much time binge-watching Netflix, loves the outdoors and has a cat who tolerates him.

UPDATED: Feb 23, 2024

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I Just Bought a Car: What do I do now?

If you have recently purchased a car, you’re joining the more than 239 million car owners in the United States. According to a report by Wards Auto, nearly every person in the U.S. has at least one car, and for every 1.3 people in the country, there’s one car or truck in the household.

Now that you’re a car owner, there are some important steps to take to ensure you are driving legally. This will require some time and work, but following these steps will save you trouble later on.

Register with the DMV

So, you’ve bought a new car, and you’re thinking “now what.”

First, congratulations on getting a new car! Before you get on the road, there are some important things to do. If you just bought a car, the first step is to register it in your state. But, before you can register your car, you’ll need to have several items.

  • The car’s title in your name or the bank’s name, if you received financing
  • Valid car insurance
  • Proof that your car passed a safety inspection
  • Proof that your car passed an emissions or smog check

Every state has different regulations to follow, but there is some basic information that is standard among most DMVs. To register your car, you’ll need the necessary documents. When you’ve bought a new car, these usually include the bill of sale, ID, title certificate, and odometer reading. You’ll take this information to your local DMV, fill out some paperwork, and pay a registration fee.

If your car had a previous owner, they probably added the mileage at the time of sale and other information. If you’re buying from a dealership, they’ve probably given you a temporary license plate and started the registration process for you along with wrapping in your registration fees. (For more information, read our “Understanding Car Registration: Do You Need Insurance?“).

If you paid in cash and bought a used car directly from another driver, they should’ve given you the vehicle title. If they were financing the car, though, there could be a delay while they wait for their bank to return it.

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Bought a new car? Do you have the right car insurance?

Your next step is to make sure your new car is insured. Ideally, if you’ve just bought a new car, you should have some kind of proof of insurance before you drive off the lot. Unfortunately, it’s not unheard of for people to get in accidents or even total their car driving out of the dealership. If you have auto insurance from another car, you could be covered while you test drive cars, but you should make the official change as soon as possible.

If this is the first time you’re ready to buy car insurance, keep the basics in mind prior to purchasing insurance. You’ll want to know the minimum liability required in your state, what the basic types of coverage are, how much insurance you need, and what the right insurance deductible for you is. Also, make sure to get a few quotes. You don’t need proof of ownership early on. You just need to know what kind of car you’re looking at and your own driving history. Insurance companies can look up things like your credit score.

What types of insurance coverages should you consider?

You have a new car. You’re ready for insurance. You walk into an insurance agent’s office and you “I bought a new car, I need insurance but I’m not certain how much coverage I need.” That agent should give a direct response. But if you’re like many savvy consumers, you may want to know what you need before you ask about insurance options. Smart shoppers have done their research ahead of time. Here’s a quick snapshot of what you will need to consider to cover your new car.

Minimum liability:  There are two types of liability insurance to consider.

  1. Property Damage: This insurance will cover damage to another person’s property in a car accident.
  2. Bodily Injury: This insurance will cover injuries another person may suffer in a car accident.

Most states require liability insurance, both property and bodily, at a minimum. The amount of coverage you need varies by state, but that amount usually isn’t enough to cover both repairs and medical costs if there is an accident. If you don’t carry enough liability insurance, you could be personally responsible for additional costs.

Many drivers also get collision and comprehensive insurance. If you’re financing your car, the lender may even require you to hold a certain amount. If you own your car outright, it’s entirely up to you. Even if you can afford to replace your car on your own, you could still lose thousands in repair, replacement, and medical costs compared to what you’d pay in insurance.

Collision and Comprehensive Insurance

Liability is required in most states, but collision and comprehensive coverage are usually optional. If you’ve financed your vehicle, chances are your financial institution will require you to have collision and comprehensive coverage.

The main difference between liability and collision and comprehensive insurance is that liability covers damages incurred by the other person and collision and comprehensive cover your damage. Collision insurance takes care of your vehicle if there is a collision-related accident. Comprehensive insurance covers your vehicle in cases of theft, natural disasters, or vandalism.

If you have a newer car or you live in a large metropolitan area, it’s a good idea to consider including collision and comprehensive coverage. (For more information, read our “The Difference Between Comprehensive And Collision Insurance“).

Do you have the right amount of insurance?

Another common hurdle is when you’ve bought the car, you’ve purchased insurance coverage, but you’re wondering if you’ve actually purchased enough insurance. This is an important consideration.

While having an auto insurance policy that saves you money is a plus, having car insurance that will protect you and your financial assets should be a top priority. The cost of repairing or replacing a newer car is typically more expensive than that of an older one. So if your coverage limits are too low, you may find yourself paying out of pocket for the costs associated with vehicle damage, medical bills, and more. We recommend reviewing your policy to make sure you have the right amount of coverage after any life changing event such as buying a new car, or getting married.

You will also want to consider how much you want your deductible to be. This is the amount that you agree to pay out of pocket, in the event of an accident. A deductible could be as low as $250, but a low deductible usually comes with a higher premium from your insurance company. The main point to consider when deciding on your deductible is what you can afford to pay at any time. For example, if you choose a higher deductible you cannot afford in the event of an accident, you could have some financial troubles paying for the cost of the accident.

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Where can you find affordable car insurance?

Because car insurance rates differ by company and by state, it’s a good idea to know which companies provide the lowest costs in your state on average. This can help you narrow down your options for which companies you want to get a quote from. Make sure you also compare coverage levels, claims processing times, and other important factors. Find the most affordable car insurance companies where you live by selecting your state below.

We recommend shopping around, and getting competitive quotes on coverage every six months, to ensure you aren’t paying more than you should.

Ready to get car insurance quotes? Call a licensed agent at [mapi-phone-link /] to compare rates.

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