Do I Need Insurance before I Buy a Car?

Insuring a vehicle moments before or after the purchase is just a technicality. The bottom line is that it must be insured before it can be driven. This doesn’t always mean that you have to buy a policy immediately, especially if you have a policy already that may provide coverage for your recently purchased auto for few days. You need to consider your current arrangements and check the position in relation to coverage offered for vehicles you own. Remember that you can change the insured auto in a policy you already have, depending on what happens to the old one, or add it on as a second car if it is allowed. Various scenarios are considered below to answer your questions.

Do I Need Insurance before Buying a Car?

We have another post titled; Do I Need Insurance to Buy a Car that explains when you do and when you don’t need a new auto insurance policy to cover a car you are about to buy or just bought. Most dealerships are required by state laws to check insurance coverage before they let the new owner drive a car.

In summary, you need insurance for a car you purchased before you can drive, unless you have another auto insurance policy that covers the new car for 3 – 4 days automatically until you decide how to insure it. The car is your responsibility the moment you buy and therefore you should insure it before you buy or immediately after. 

Do you buy insurance before or after the car? Technically, you must own the car to be able to insure it because you must have insurable interest on the vehicle. Also, many states would only allow the owner to insure a private automobile. However, what counts is the intentions and doesn’t really matter if you buy insurance first and car after or car first and insurance after if it is only matter of time to complete the car purchase?

However, you may have to buy a new auto insurance policy with Comprehensive, Collision and Gap Insurance Coverage when you are getting an auto loan, even though you may have a liability only car insurance for another car. Your lien holder will not release the funds until they have confirmation that the vehicle is insured as they want.

What you should be asking is; can I get an insurance quote before buying a car? The answer is yes you can get quotes for a car you like to buy if you know enough about the automobile like its VIN number and other details. Then, you know exactly how much that particular car will cost to insure. If you are happy with everything you can place it on cover just after or before completing the vehicle purchase.

On a different note, you may need insurance even though you don’t own a vehicle in certain situations. For example, you may have to get auto insurance to satisfy SR-22 requirements to get your driving licence back. In such a case, buying non-owners car insurance may do the job for you.

Do I Need Insurance to Buy a Used Car?

Insurance requirements are the same for new or used cars and above terms apply for a used car too. The only thing that may chance is the requirements for proof of insurance. Used car dealerships will probably need to see proof of insurance before they let you drive your newly purchased automobile because of the state requirements that apply to dealerships.

It is unlikely that a private seller of a used car is bothered if you have insurance or not. However, this doesn’t make it alright for you to drive a car without insurance. It is your responsibility to make sure that the used car you bought from a private owner is insured before you start driving it. You may be able to ask the current owner to drive it up to your doorstep before you complete the purchase if you are not sure about the insurance and don’t want to miss on a good deal.

Can I Drive with Dealership Insurance until Home?

Unless the dealer delivers your car to your doorstep their insurance doesn’t help you. You wouldn’t be covered by their insurance if you drive home after buying a new or used car. Once you complete the purchase the vehicle is your responsibility and you must insure it to make sure you comply with the laws and protect your investment.

The best thing to do is to check auto insurance costs before going to buy a car. If you line up an insurer already it would be easier to give them a call and place your new or used automobile on cover. Otherwise, you may be too excited and keen to drive it that you may buy an unsatisfactory vehicle insurance policy in a hurry. Generally, these policies that  are bought in a hurry are not suitable for you or too expensive. That is why it is important to take your time and choose well.

You have to buy at least mandatory auto insurance coverage to be able to drive your new vehicle legally. But, you would probably want it to be covered fully with Collision, Comprehensive and Uninsured Motorist Coverage since it is a new car (or a used auto of some value). Check your options beforehand. This may affect your decision on which car to buy as well. Automobiles cost more or less to insure depending on their safety ratings, engine power, value and theft statistics.

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