In the black community owning a car is proof that you have arrived in many instances because many still have to resort to public transportation. When we get our cars we never really consider how much it will cost to keep that car. For example there is regular maintenance you need on the car, and then there is insurance. Most will spend money on the car care, but many will drive around without insurance. In many states that’s illegal and it can be dangerous and very costly if caught without it.

A car is not a good investment by Wall Street standards. Unlike real estate, vehicles rarely appreciate. The moment you drive off the lot, a vehicle starts depreciating at an alarming rate. According to Carfax, your car’s value typically decreases 20% by the end of the first year of ownership. For the next four years after that, you can expect the vehicle to lose roughly 10% of its value annually. In five years, you will have lost at least 60% of your initial investment.

How much car insurance do you need? The answer to that question depends on the year and make of your car, whether it’s new or used, where you live, your driving record, the state of your finances, how much you drive the car, and how good your credit is at the point of purchase.

Why Getting Car Insurance Is Beneficial

• • Buying car insurance is a way to protect your investment.
  • States have minimum insurance requirements, with liability the only insurance type that is required almost across the board.
  • Collision coverage may help defray car repair costs after an accident, but it may not be worth the cost if the value of your auto is too low.
  • Comprehensive insurance protects your vehicle in case of theft, fire, natural disasters, or other unexpected problems—anything but a collision.
  • Uninsured motorist coverage is worth considering because many people in the U.S. drive without insurance.