Do Car Dealerships Offer Temporary Insurance?

Last Updated on December 15, 2025

Some car dealerships can help you arrange temporary coverage so you can drive off the lot the same day.

But in many cases, you don’t actually need the dealership’s temporary insurance. Your personal auto policy may already cover newly purchased vehicles for a short window (often called a “newly acquired vehicle” grace period), as long as you notify your insurer in time.

Below is everything you need to know about dealerships and temporary insurance—when you might need it, when you probably don’t, and what to do before you sign the paperwork.

Key Takeaways

• Some dealerships can arrange “drive-away” temporary insurance, but many require you to show proof of your own coverage before you can take delivery.
• If you already have auto insurance, your policy may cover a newly purchased vehicle for a short grace period—especially if the new car replaces one already on your policy.
• Grace periods and coverage carryover rules vary by insurer, state, and whether the car is a replacement or an additional vehicle—verify before you leave the lot.
• If you don’t have an active policy, you typically need to buy insurance before driving off—true “short-term” policies are rare, so many drivers buy a standard policy and adjust later.

Do Dealerships Offer Temporary Car Insurance?

Sometimes. Some dealerships can arrange short-term coverage (often called drive away insurance) through a partner insurer or a third-party program. Other dealerships don’t offer any in-house option and will require you to show your own proof of insurance before you can take delivery.

If temporary coverage is available, it typically lasts anywhere from a day to a few weeks—just long enough to give you time to add the vehicle to your personal policy (or shop around for a new policy).

Important: A dealership’s insurance for test drives or dealer plates is not the same as you being properly insured. Don’t assume you’re covered unless you have proof of coverage in your name (or confirmation your existing policy extends to the new car).

Dealerships Usually Require Proof of Insurance

Most dealerships require proof of insurance when you lease or finance a vehicle. If you can’t provide proof, you may need to arrange coverage (either through the dealership program, your insurer, or a new policy) before you can drive the vehicle off the lot.

Why? Because the vehicle is collateral. If you total the car right after purchase with no insurance, the lender (and sometimes the dealership) is exposed to a big loss.

Does My Personal Insurance Policy Cover New Vehicles?

In many cases, yes. If you already have an active auto policy, it may temporarily extend coverage to a newly purchased vehicle—especially if the new car is replacing a car already on your policy. You still need to officially add the vehicle to your policy within the required time window.

Coverage can vary based on:

Your insurer’s rules: Some policies extend the same coverage you currently carry (including comprehensive and collision if you already have them). Others may provide more limited coverage, especially if the new vehicle is an additional car and not a replacement. Contact your insurer before you buy to confirm.

Your policy and your situation: Grace periods often depend on whether the new car is a replacement or an additional vehicle, and whether you already carry physical damage coverage (comprehensive/collision) on at least one car.

Timing: Many insurers have a grace period for newly purchased vehicles, but the window is not universal. It could be as short as a couple of days or as long as a few weeks. As a general guide, many drivers see something in the two days to 30 days range—yet it’s always safest to verify before you leave the dealership.

If you don’t already have a policy, there’s usually no grace period to rely on—you’ll need to buy insurance before you drive the car home.

How Temporary Insurance From the Car Dealership Works

If your policy doesn’t extend to the new purchase (or you don’t have an active policy), you may need temporary car insurance—either through a dealership program or by purchasing a standard policy and adjusting later.

Generally, here’s how dealership-arranged temporary coverage works:

• It’s usually designed to function like a basic full coverage policy for a short time (state minimum liability + physical damage coverage for the vehicle), but benefits, limits, and deductibles can vary by program.
• The dealership may offer a set duration (for example, 7–14 days), or may allow you to choose something like one day, one week, or one month, depending on what they partner with.
• Not all dealerships offer it. Some require you to bring your own proof of insurance and have no temporary option available.
• Some dealerships advertise free insurance as a promotion. Always read the fine print: you still need to confirm limits, deductibles, what’s covered, and what happens when the temporary term ends.

If you can’t show proof of insurance and the dealership can’t arrange temporary coverage, you generally won’t be able to take delivery that day.

How the New Car Insurance Grace Period Works

A “new car grace period” usually means your existing policy automatically extends coverage to a newly purchased vehicle for a limited time—as long as you notify the insurer within the required window.

Some insurers offer a grace period automatically, while others require you to add the vehicle immediately (or provide only limited coverage until you do). The safest move is to call your insurer before you shop, ask what your grace period is, and confirm what coverage carries over.

Alternatives to Temporary Insurance from the Car Dealership

You may not need dealership-arranged coverage at all. Here are the most common alternatives:

Use your existing policy: If you already have insurance, your policy may extend coverage for a short time. It’s still best to contact your insurer before buying a new vehicle so you know exactly what’s covered and for how long. Then add the car to your policy as soon as possible after purchase.

Buy your own coverage (even if it’s “short term”): True one-week or one-month policies are rare. A common workaround is buying a standard 6- or 12-month policy and changing or canceling later (depending on fees and state rules). NerdWallet explains the options here: temporary car insurance.

Start a new policy before you buy: If you don’t have current insurance, you can often purchase a policy in advance if you know the make/model and can provide the VIN once you have it. This is often the simplest way to avoid dealership pressure and drive off fully covered.

Buy a standard policy and cancel later (if needed): If you want flexibility, you can buy from an insurer that doesn’t charge a cancellation fee in many cases, like GEICO, Allstate, Progressive, or State Farm. (Rules vary by state and company—always confirm.)

FAQs on Dealership Temporary Car Insurance

Final Word: Verify Coverage Before You Leave the Dealership

Many drivers are covered through their existing policy for a short window when buying a new vehicle—but not always, and not in the same way for every policy.

Before you sign, confirm one of these is true: (1) your current insurer confirms you’re covered to drive the new car home, or (2) you’ve purchased a policy that starts immediately, or (3) the dealership’s temporary coverage is in place and you understand what it covers and when it ends.