Properly insure your vehicle
Accidents happen, and insurance is a must to protect you, your occupants, and your vehicle from loss and potential financial ruin. First there's comprehensive and collision protection which covers damage to or loss of your vehicle by theft, fire and accident. Next there's liability protection which protects you in the event that someone decides to sue you. Third is the uninsured motorists protection which covers your vehicle in the event that you are in an accident with someone who has no insurance. Finally, there's a variety of medical coverages for others that are injured in an accident.
For information on the process of selecting and obtaining the right insurance protection for you and your vehicle, visit our automobile insurance section.
With your new vehicle, you may want to consider gap insurance which protects you against owing more than your vehicle is worth. For example, assume you buy a car worth $18,500 with a $1,000 downpayment and a five-year loan at 4% interest. Six months and 5,000 miles later, you have an accident and the car is totaled. You would still owe the bank $15,903 on a car values for insurance purposes at about $12,000. You would have to come up with the difference to pay off the loan, and also shop for a new car. Gap insurance would cover the difference between $15,903 and $12,000. Most insurance companies charge as little as $20 per year for this coverage, so you should consider it unless you are making a large downpayment.
Once you have picked up your vehicle, and arranged for your insurance protection, the next big expense (other than fuel) over the coming years could well be related to maintenance. Learn the real truth about properly maintaining your vehicle.