Buying auto insurance can seem a remarkably complicated business and often fills even seasoned insurance veterans with a mild sense of foreboding and trepidation. First-time buyer need not worry, however, as the process need not be nearly as complicated as it might first appear.

As with many things, the point point to make is do plenty of research. Think about exactly what you need from your policy and what you are looking for. Don’t be sweet-talked into buying more cover than you might actually need, thereby costing you unnecessarily.

Remember that each policy is different and offers different levels of coverage. Some stipulations are mandatory, depending on where you live, whilst some are optional. Common stipulations on a policy might include Comprehensive Coverage, which would insure you for damage done to your vehicle by factors other than a collision. These can include theft, fire, vandalism and adverse weather. Also, Bodily and Property Liability Coverage are common, as these cover costs that you will be legally responsible for in case of bodily injury, death or property or vehicle damage to another person in case of an accident caused by you whilst driving. This is just a small snapshot, and remember that, even as a first-time buyer, going for the bare minimum of coverage may not be the best thing for you. Be sure to fully compare each quote and what it offers and decide whether you need all of the protection on offer. Remember also that adding option coverage often costs no more than a few dollar per month.

Think seriously as well about a factor known on a policy as the ‘Deductible’. The deductible is what you agree to pay before your insurance company begins to cove the cost of other losses. This is common especially when you choose Collision or Comprehensive insurance coverage. In general, if you choose a higher level of deductible, you will pay a lower premium.

If you have yet to buy your car and are busily weighing up all of the available options (and perhaps dreams), be mindful that the make and model of car you buy will have an impact on your insurance premium. A young, first-time buyer with a powerful sports car will pay excessively for their insurance premiums, especially as they also tend to be younger. Many might be tempted to skip coverage altogether-especially money-conscious students away at college. The answer to this is simple: Don’t! If you are caught doing so, quite apart from any other immediate legal ramifications, you will likely be hit with huge insurance premiums for decades to come. You can also try searching online for the latest information on providers and rates in your area that can help you out rather than take risks – doing so is highly recommended.

Congratulations! You’ve started driving, now get ready to open your wallet:S. Auto insurance is required by law and everybody must pay to get it regardless of age or skill level. When I first started driving, the process of getting insured was fairly straight-forward since I just went to my parent’s insurance agent and got tacked on to their policy. This may be the best case scenario for many new drivers as well, but it is not always the best route to take. Here are some tips to make sure that you are getting the best deal possible and your likely limited funds are not being unnecessarily wasted.

Latching on to your Parents Policy

This is the route that the vast majority of first time drivers choose to take, and for good reason. Most of the time it is cheaper, and your parents likely have some sort of rapport built up with their agent. The reason that this method is often times cheaper, is due to the beauty of the “multi-line discount”. What this means is that many insurance companies will offer a discount to policy holders who have multiple lines of coverage through their company. In my case, my parents had home-owners, auto, and life insurance through the same agent, and as such I was able to see a significant discount in my premiums.

Sidenote: an insurance premium refers to the monthly payment that is due to keep your insurance policy in effect. A deductible refers to a one time payment made (often $100, $250, $500, or $1000 depending on your plan) if you have an accident and must file an insurance claim. In theory the insurer will cover any additional expenses above and beyond the deductible you pay to them.

Why so Expensive?

Even with the discounts from your parents policies however insurance will NOT be cheap. Much of this stems from the fact that statistically teens and early 20-somethings have the about the highest rate of automotive accidents. This number subsides for many years and starts to rise again past the age 60 or so. Insurance premiums follow this curve, and are highest when you are first starting to drive, and again when you are getting too old to be driving. Your rates will drop significantly when you reach age 25 for most insurers, and stay relatively low until you’re old and gray. I was 16 when I purchased my first vehicle (nothing special, just a 1989 F-150 pickup truck), and with all the discounts (including good student discount), I was still paying on order of $100 a month for liability only coverage… Things got even more crazy several years later when I purchased a sportier two door Mitsubishi Eclipse which cost me over $250 a month for full coverage. (This was more than my monthly car payment for the vehicle. As I write this now, I am 26 years old, and pay around $75 a month for full coverage on my current vehicle.

Insurance Price Factors

The main factors that will affect your initial premium rate are: age, multiple policy discounts, Good student discounts, type of car you drive, and family driver history (if you are using your parents insurer). Type of Car: As a general rule, the sportier the car, the more expensive your insurance will be. Duh. It’s no secret that when given a fast car and the right circumstances, most teens will drive fast. I certainly did, and I have the traffic tickets to prove it. There is an interesting proviso to this however, because some fast cars can be cheaper than others. This applies mainly to sport sedans, and luxury sedans which are viewed by insurance companies to be safer, and statistically involved in less accidents. It’s hard to offer exact guidance here, because every company is different, but if you’re car shopping for your first ride as well, it will never hurt to call up your (or your parents agent) to find out which cars on your favorites list are going to be the cheapest to insure. Good Student Discount: This is a fairly popular discount offered by most companies, because according to their statistics, students with GPA’s above a 3.0 are generally involved in less traffic incidents, and are thus given better rates. Yeah, good grades to pay off sometimes… who would have thought.

Non-Parent Policies If your parents policy has a laundry list of accidents attached to it, it might be a good idea to seek insurance on your own. A great way to do this is online, by filling out free quotes from various popular insurance agencies (many of whose links can be found throughout this site). One nifty little trick to consider as well, is to purchase the cheapest term life insurance policy along with your auto insurance. In my case when I moved out and detached from my parents policy, I added the lowest life insurance policy to my auto insurance, and with the discount I received from having multiple lines of coverage through the same company it was actually cheaper for both policies than just automotive by itself. Weird, I know.

Wrap Up Summing up this article, if your parents are in good standing with their insurance company, your best bet is probably to use their agent. If not, or if you are already living on your own, get multiple quotes from different insurance companies, and be sure to ask about multi-line discounts if you purchase cheap life insurance from them as well. Even if it doesn’t save you any money, often times you can pick up valuable coverage such as renters insurance for next to nothing with your multi line discount.