You can choose to buy any year car and only place liability on it if you own the car in full and do not have it financed.

NJ law requires liability insurance minimums of 15/30/5. These limit amounts stand for $15,000 per injured person for a total of $30,000 for all people hurt in one accident and $5,000 for property damage from one incident. Personal Injury Protection (PIP) of at least $15,000 is also required.

If you buy a car and it is financed though then most all lien holders and/or insurance companies will require you to place collision and comprehensive coverages on your vehicle until your loan is paid off. If you buy a car and finance it the financing documents usually note what types of insurance and limits you must keep on the vehicle.

The lien holder normally has a right to protect their interest or collateral, the vehicle, by getting "forced" insurance on it if they find that you do not have insurance or it or do not have insurance that meets their documented requirements. If your loan agreement includes the provision allowing the lien holder to obtain auto insurance for the vehicle, the insurance charges are subject to interest in most states so the premiums will be much higher than if you purchased the insurance yourself typically.

If you are going to pay cash and thus pay for a car in full without financing then it is your personal choice if you want to place collision and comprehensive on it. If it is a newer car then normally one would want to place these physical damage coverages on the car to protect it. If you have a few types of used cars in mind and are trying to determine what type of insurance coverage to place on it take advantage of our insurance coverage calculator to decide what coverages are right for you.

For more help on understanding auto insurance you can contact the consumer division of your New Jersey's insurance regulator.