Transfer Car Insurance to a New Car: A How-to Guide

The coverage you need depends on whether you own, finance or lease your car:

• If you own the car outright and aren't financing it, you can cover it with your state-required coverage.
• If you're financing your vehicle, your lender will likely require full coverage insurance. If your current policy includes only liability, update it to include collision and comprehensive insurance to avoid violating your lease agreement.
• If you're leasing a car, you must get your own coverage. Some leaseholders may require gap insurance.

The table below shows the most appropriate insurance type for each situation.

Car insurance laws vary by state, and minimum requirements differ depending on where you live. Most states require only minimum coverage — your insurance won't cover repair costs if your vehicle is damaged.

Consider increasing your coverage limits, especially if you’ve purchased a high-value vehicle. A full coverage policy with comprehensive and collision insurance may be a better choice if you want to avoid large out-of-pocket expenses.

The average annual cost of insurance is $1,424 for a full coverage policy with 100/300/100 liability limits. Your premium will likely increase if your new vehicle is worth more than your old one. If your coverage changes, you may either pay the difference upfront or spread it across future payments. Your actual rate may vary based on factors like your car's make, model and year. Increasing your coverage limits can also raise your premium.

Your insurer may charge an administrative fee for transferring car insurance. Request a quote before finalizing your new vehicle purchase so you know what to expect for rates and coverage. You can shop around without having to open a new policy.

When estimating the cost of transferring car insurance, several factors play a role, including your car's make and model, coverage level, your location's risk level and any additional fees. The table below lets you adjust for your car's make, model, age and desired coverage to get an estimate.

Car insurance companies consider several factors when calculating premiums. Comparing rates helps you find the best policy for your needs. MoneyGeek's calculator provides personalized quotes from multiple providers based on basic information, giving you an accurate estimate of your car insurance costs.

It's best to add your new car to your policy right away, but some insurers offer a grace period, giving you extra time to complete the process. A grace period is the time after your due date that you can pay your premium before your coverage lapses. When you buy a new car, it refers to how long you have to inform your insurer and update your policy.

Grace periods vary by insurer but typically last seven to 30 days. You can drive your new car during this time, even if you haven’t added it to your policy yet. However, after the grace period, driving without updating your policy or purchasing a new one may leave you driving an uninsured vehicle. Ask your insurer about the length of your grace period.

Transferring insurance to a new car is simple and ensures continuous coverage. This guide helps you understand the steps, requirements and how to update your policy when switching vehicles.

You can transfer insurance from one car to another when you buy a new vehicle. Here are the most common questions about how this process works.

Overview

MoneyGeek consulted reputable sources to provide you with the most up-to-date processes and information. We gathered data from leaders in insurance, finance and economics, along with information from government, academic and research organizations. Our auto insurance guides also include data from industry leaders like AM Best, J.D. Power and the National Association of Insurance Commissioners (NAIC).

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