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You’ve said goodbye to studying long hours and taking tests and said hello to life after graduating college (which often involves managing things on your own). This new adventure can be hard, but we’re here to make sure you feel protected on the road if you are getting your own car insurance.

First off, liability insurance is important and legally required. Give yourself a healthy amount of liability coverage and do more than just the state minimum requirement. Remember, your liability limits cover what your legal liability is for a covered accident that involves injury to another person or damage to someone’s property, up to the limit of liability you selected. It is often better to have more than enough liability to be safe.

Also, consider comprehensive and collision coverage. These coverages are optional but are crucial when it comes to protecting your vehicle on the road. If you finance or lease your vehicle, many lienholders do require that you have both of these coverages included on your policy. Comprehensive coverage helps to protect your auto in scenarios like fire, theft, hail, flood, an animal hitting your car, or a tree falling on it. Collision coverage covers damages to your vehicle in the event that it overturns or collides with another car or object. (Despite popular confusion, this does not include an animal).

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Graduation is an exciting and significant milestone, but starting a new chapter in life can mean some big financial decisions ahead. Whether it is you or a family member that is sporting the cap and gown, purchasing a car is a tempting next step for a new grad. However, with newly acquired freedom comes newly acquired responsibilities. What car insurance should be purchased now that the parentals might be stepping back? Should a car be bought new or used? Leased or paid for in full?

Before you decide if purchasing a car is a good idea, assess your projected monthly income. 50% of millennials say they are living paycheck-to-paycheck and unable to save for the future, which is a slightly scary stat. Even more concerning is the 40% that say they feel overwhelmed by their debt. Most financial advisors would suggest getting your finances in check before adding another expense to the list. If the city you plan to live in has public transportation, try that out before you decide to buy a car. Your new job might even provide commuter benefits! You could also check out local carpooling programs, or car sharing services such as Getaround. And if your commute isn’t far, try investing in a less-expensive vehicle like a bike or scooter.

If you decide that purchasing a car is the right choice, buying used is probably your most economical option. Our friends at The Zebra even compiled a list of the top 10 used cars that give you a “bang for your buck”. Once you’ve found the perfect car, it’s usually better to pay in full since you won’t pay interest, but sometimes you can luck out with a favorable interest rate.

Time to tackle the next big decision: choosing your new car insurance. We are slightly biased in this area, but if you are going to be driving less than 10,000 miles a year (around 200 each week), you could find significant savings with pay-per-mile insurance. If you plan to use your car primarily for road trips, family visits or grocery runs on the weekends, per-mile insurance is for you. Our low-mileage customers are saving an average of $500 per year!