You may have heard some insurance is mandatory. That is liability cover. It pays out if you injure someone else by the way in which you drive. This reflects the general law of tort which fixes you with the bill if you are negligent. All the other forms of insurance are at your discretion if you pay cash for your vehicle. If you decide you want to insure yourself, the world is happy to let you get on with it. So look carefully at your bank balance, your health insurance policy, whether you own your own home and it has a positive equity, and whether there are any assets, e.g. the stocks in a 401k account. Now imagine you are sitting in your car at a stop light, minding your own business, and a vehicle driven by someone uninsured and under the influence of something mind-blowing crashes into you, how much can you afford to pay? First there might be the cost of your own medical treatment. Is that covered by your current health plan? Then comes the repair or replacement of your own vehicle and all the costs associated with that, e.g. paying for for it to be towed to a repair-shop, renting an alternate while your vehicle is off the road, and so on. Will all that go on your own credit card, or will you borrow against the security of you home, or sell the stocks in your retirement account?
In this, we may be talking about a substantial amount of money and, if the other driver is uninsured, the chances of getting anything out of him or her are small. So perhaps you should buy uninsured or underinsured driver cover and have collision cheap car insurance. That way, you can claim from your own insurance company should there be no liability policy in place for the other driver, and repair or replace your own damaged vehicle. It all comes down to priorities based on your own savings and credit status.
But if you propose to buy your vehicle using an auto loan, there's no choice in the matter. Every lender will want to see proof of a collision policy. That way, should you be unlucky and find your vehicle totaled, there will be a reasonable amount of cash available to pay off the loan. Consider buying gap insurance if you buy a new car with a loan.