Before you even buy a new car, you should start thinking of insurance. Are you already insured? If you’ve had a car previously, you might still be covered under that insurance policy. So check that first! Some insurers allow you coverage for some time (usually one month) after trading in your last car. You should know your insurance status before making the final decision to purchase a car. In fact, some places won’t even allow you take the car off the lot without knowing your coverage status. Some states require insurance in order to register the car and get valid license plates. So, early in your car buying process: be ready with insurance.

Just like any other major purchase, shop around when it comes to car insurance. You know the names of a few major providers from the media, but you don’t know who will be best for you. The amount you pay for car insurance is based on your history and experience, as well as the details of the car—even color is a factor when it comes to the price of car insurance. There are online services available to help you in your comparison shopping, such as Quicken Insurance ( and InsWeb. These services are provided by outside services unaffiliated with any particular provider, which makes me more comfortable trusting their results.

Next, decide just how much coverage you need. Most people end up overpaying for car insurance because they pay for services that they will never use. According to Consumer Reports, coverage segments that you need and should have are bodily injury liability, property damage, uninsured and underinsured motorist coverage, collision and comprehensive coverage, personal-injury protection, and medical-payments coverage. Other coverage offerings can be counterproductive or can already be offered through other memberships, such as an auto-club membership.

Many insurance providers offer small incentives and discounts which could make them a better option for you, regardless of the initial quote. For example, some insurance companies give discounts to students or families of students who drive who get good grades. Also, consider grouping your policies together (like one provider for car and house insurance) because some companies will offer a discount. You may find that if you get one provider for multiple services, you will come out cheaper in the end. Finally, look into group affiliation discounts. Some providers will offer discounts to members of a particular organization. This is usually the biggest discount. Your organization may have worked out a partnership with a specific insurance provider that could greatly benefit you.