Do You Need Car Insurance Before Buying a Car?

If you’re buying a car and don’t already have auto insurance, you’ll need to purchase coverage for your new vehicle before leaving the lot. While some people may wait until they're signing on a car to secure auto insurance, it’s usually better to find coverage well in advance.

Shopping for insurance ahead of time allows you to compare offers, determine the appropriate level of coverage and find a policy that’s right for you. You don’t need your new car’s vehicle identification number (VIN) to review quotes, so you can compare sample rates and decide on an insurer before you’ve purchased your vehicle.

Key Takeaways

You don’t have to wait until you buy your new car to purchase auto insurance.

Shopping around for a policy can ensure that you get the best deal for you.

You can choose your policy start date to begin coverage on the day you plan to take your new vehicle home.

You Need Insurance When You Buy a Car, But Not Before

Navigating the process of purchasing a new car can be confusing, but luckily the rules surrounding insurance are pretty simple. In almost all states, you need auto insurance before buying a car; it’s illegal to drive your new vehicle off the lot without being adequately insured.

MoneyGeek explored some of the most important things drivers should know before buying and insuring a new vehicle.

Should You Have Insurance Before Buying a Car?

You don’t have to have insurance while you’re shopping for a car, but you will need to secure insurance coverage before you can take possession of your new vehicle. How much insurance you need depends on where you live and your vehicle. In general, we recommend purchasing as much car insurance as you can comfortably afford. Even if you’re on a budget, you should consider adding comprehensive and collision insurance to your policy.

How Soon Do You Need Auto Insurance After Buying a Car?

If you already have auto insurance, there’s typically a grace period of seven to 30 days before you need to report your new car to your insurance company and add it to your policy. If you don’t have any car insurance, you’ll need to purchase a policy before you’re legally allowed to drive your car.

Can You Ever Buy a Car Without Insurance?

Technically speaking, some car dealers may allow customers to purchase a car without having an active auto insurance policy. That said, you’re still not allowed to drive the car off the lot until it’s insured.

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Drivers who already have auto insurance have a grace period before adding their new car to their auto insurance policy. This period can vary, but it typically lasts between seven and 30 days. Different states have different regulations for grace periods and lapses in coverage, so be sure to check your policy details to make sure you’re covered.

How to Get Auto Insurance Before Buying a Car

Before you drive your new car home, you’ll need to purchase an auto insurance policy that meets your state’s minimum requirements.

1
Shop around for multiple quotes.
When looking for a car insurance policy for your new vehicle, shopping around for quotes can help you get the best deal possible. Be sure to compare rates from at least three insurers using similar coverage options. It helps to have a driver's license and an established driving record; it is hard to get real car insurance quotes without a license.
2
Decide on the coverage you need.
How much coverage you need depends on where you live, the vehicle your plan to buy and your personal preferences. Most states mandate a certain amount of minimum coverage. If you have a more expensive car, you may want to consider purchasing additional coverage. Optional coverage types like comprehensive and collision coverage are also recommended.
3
Gather information for the drivers you want covered under the policy.
You’ll need to have driver information for everyone on your policy, including their names, birth dates, social security numbers and driver’s license numbers before you purchase a plan.
4
Decide on a policy option and insurer.
Once you know what insurer you want to use, you can give them all of the information mentioned above and get your policy ready to be put in place as soon as you pick a specific vehicle.
5
Choose a vehicle.
You’ll need specific information about your new car to purchase a policy, including the make, model, year and VIN. While the VIN is necessary to secure coverage, you can still browse quotes before you know it.
6
Finalize purchasing your car and insurance policy.
Once you know the exact car you plan on purchasing, you can supply the insurance company with your car’s VIN and finalize your policy. Most insurers let customers set the start date of their policy — be sure that your policy is active before you get your new car.
Before paying, you might want to ask your insurer if they offer a no down payment car insurance so you will have an option to pay monthly instead of paying full upfront.

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Frequently Asked Questions About Getting Insurance Before Buying a Car

Buying car insurance for a new vehicle can be tricky. Here are some answers to the most commonly asked questions related to insurance for new cars to make the process easier.

Do you buy car insurance before or after purchasing a car?

You may purchase an auto insurance before or on the same day buying a car, what you can't do is drive a new car out of the dealership without a car insurance. If you already have a policy, there’s typically a grace period of seven to 30 days before you have to add your new vehicle to your insurance plan.

Can you get a car insurance quote before buying a car?

You can browse car insurance quotes from different insurers before purchasing a vehicle. When you’re ready to finalize your policy, you’ll need to provide your new car’s VIN.

Can you drive a new car home from the dealership without insurance?

In almost every state, it’s illegal to drive your car off the lot without proper insurance coverage.

Will the dealership require proof of insurance?

Yes, a dealership will require you to have proof of insurance before you can drive off the lot in a new car. That said, you don’t have to have car insurance to test drive a vehicle.

Can you buy car insurance on the same day?

Yes, you can buy car insurance the same day you buy a vehicle. However, doing so isn’t always the best way to handle your insurance needs. Taking the time to shop around and review your options can help you to secure a better rate.

Who needs car insurance?

Anyone who drives a vehicle needs to be properly insured.

Who should get car insurance?

The car owner is responsible for purchasing insurance coverage for themselves and any other drivers they want on their policy.

When is the best time to get car insurance?

It’s best to get car insurance well before you purchase a new car. Make sure your policy is active before you drive your car out of the dealership.

About Mark Fitzpatrick

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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Do You Need Auto Insurance Before Buying a Car?

TABLE OF CONTENTS

Key Takeaways

Compare Insurance Rates

You Need Insurance When You Buy a Car, But Not Before

Should You Have Insurance Before Buying a Car?

How Soon Do You Need Auto Insurance After Buying a Car?

Can You Ever Buy a Car Without Insurance?

How to Get Auto Insurance Before Buying a Car

Shop around for multiple quotes.

Decide on the coverage you need.

Gather information for the drivers you want covered under the policy.

Decide on a policy option and insurer.

Choose a vehicle.

Finalize purchasing your car and insurance policy.

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