Final answer:
The statement is true; collision and comprehensive coverage is typically optional unless you are financing your car, in which case it is required by lenders. Auto insurance rates vary by factors such as driving history, vehicle safety, and age. Payments can be made on different schedules, and coverage is an ongoing expense.
Step-by-step explanation:
The statement that collision and comprehensive coverage is optional in most states unless you are financing your car is true. When you finance a vehicle, the lender requires this coverage to protect their investment. While most states mandate carrying auto insurance, typically that is the minimum liability coverage, not collision or comprehensive. These types of insurance cover the cost of damage to your own vehicle, whether it be from an accident (collision) or other risks like theft, fire, or natural disasters (comprehensive).
Insurance rates can be influenced by a variety of factors including the vehicle's safety rating, your driving history, the age and history of the vehicle, and the policyholder's age. Younger drivers typically pay higher premiums due to their lack of driving experience compared to someone around 30 years old. Payments for your coverage can usually be made on different schedules, such as monthly, quarterly, or bi-annually.
Given that insurance is a way to mitigate financial loss due to unforeseen events and that it is a recurring expense even after a vehicle is paid off, making well-informed decisions about the types and levels of coverage is critical for financial planning.