How to Get Car Insurance Before Buying a Car
Last Updated on September 18, 2023
If you’re buying a car, then you need to get car insurance.
Fortunately, getting car insurance before buying a car is easy. Most insurers make it easy to get car insurance on new vehicles. Alternatively, you can buy temporary coverage from your dealership to cover your new vehicle.
Keep reading to learn everything you need to know about getting car insurance before buying a car.
You Need Insurance to Drive Away with Your New Vehicle
If you’re buying a car from a private seller, you also need legal insurance. The private seller may allow you to drive away without confirming proof of coverage. However, it’s illegal (and risky) to drive without insurance.
Fortunately, there’s an easy solution: most insurers provide a grace period on new cars. If you buy a new car and already have a personal auto insurance policy (say, for your other vehicles), then that policy should extend to cover any new vehicle you purchase. Most car insurance policies have a 7 to 30-day grace period.
If you don’t have insurance, you can still buy coverage before buying a vehicle. You can contact insurers and compare quotes, then activate your policy the day you purchase your new vehicle, for example.
Option #1: You Already Have Car Insurance
If you already have a personal car insurance policy and are buying a new vehicle, then you should have a grace period on new vehicle purchases.
Here’s how the grace period works:
- Let’s say you already own a vehicle and have a State Farm auto insurance policy for that vehicle. Your vehicle has full coverage car insurance from State Farm.
- You decide to purchase a new vehicle. You shop around, then find the vehicle you like from a local dealership.
- You visit the dealership and then drive away with the new vehicle.
- State Farm offers a 14-day grace period on new vehicle purchases. State Farm extends your original car insurance policy to cover your new vehicle for a maximum of 14 days.
- You need to tell State Farm of your new vehicle within this 14-day window. Otherwise, you could lose coverage.
- After telling State Farm about your new vehicle, your car insurance premiums may rise. However, you now have the coverage you need for your new vehicle.
Whether you have an existing policy with State Farm or any other major provider, you should have a new car grace period. You can buy a new car, drive it for a few days and then alert your insurer of the new purchase – all while remaining covered.
Contact your insurance company or check your policy to verify your car insurance grace period. Some car insurance companies have a 7-day grace period, while others, like GEICO, Allstate, and Progressive, have a 30-day grace period.
Option #2: You Don’t Currently Have Car Insurance
If you do not have car insurance but are buying a new vehicle, that’s okay. You can easily shop for insurance, find the right policy, and add your new car to that policy as soon as you buy it.
Here’s how it works if you don’t currently have car insurance:
Step 1) Shop around. Start by comparing quotes from insurers in your area. Most car insurance companies don’t need vehicle information until the final stages of the application. And, if you don’t have a vehicle, you can easily input that option using the online form. Or, you can call a local insurance agent in your area.
Step 2) Pick your coverage. If you’re buying a new vehicle, then you generally want full coverage car insurance with liability insurance, collision coverage, and comprehensive coverage.
Step 3) Provide your insurer with driver information. Your insurer needs to know your name, date of birth, driver’s license number, Social Security Number, and certain other information before you buy. You may need to provide your personal information along with the personal information of other licensed drivers in your household.
Step 4) Enter information about the vehicle you’re thinking of purchasing, if possible. To get more specific price quote information, tell your insurer the make, model, and year of the vehicle you’re looking to buy. If you don’t know which vehicle you plan to purchase, then you can skip this step. However, it can give you a better idea of which company is offering the best prices.
Step 5) Purchase your vehicle and inform your insurer to activate your policy. Finally, it’s time to buy your vehicle. Your insurer must know your vehicle identification number (VIN) to activate your policy. Your dealership may require you to provide proof of insurance before driving your new car off the lot. If you’re buying from a private seller, make sure your insurance policy is active from the date of purchase to avoid a lapse in coverage.
Other Things You Need to Know About Getting Insurance Before Buying a Car
It’s easy to get confused when getting car insurance before buying a car. Here are some of the things you need to know about getting insurance before buying a car:
You Cannot Drive a New Car Without Insurance: Driving a new car without insurance is illegal. Even if your dealership allows you to drive your new car off the lot without insurance, you’re putting yourself at significant financial risk. Virtually every state requires a certain minimum amount of car insurance coverage. Even in states without specific car insurance requirements (like New Hampshire), you are liable for damage you cause while driving. If you don’t have valid insurance, you’ll need to pay out of pocket for medical expenses, vehicle repair costs, and other costs incurred due to your accident.
Inform your Insurer of a New Car ASAP: Most major insurers have a new car grace period. This grace period makes it easier to buy a new vehicle. However, you should still notify your insurer of your purchase as soon as possible. The sooner you contact your insurer about your new vehicle, the less risk of experiencing a messy claim during your grace period.
You Can Get Same-Day Insurance Coverage: Many insurers offer same-day insurance coverage, allowing you to buy a policy as soon as today, if necessary. If you’re shopping for a new vehicle and decide to buy, then you may be able to buy a new policy to cover that vehicle ASAP.
Coverage on Your Old Policy Extends to Your New Car: If you have a minimum liability policy, then your new car will only have minimum liability coverage. Most dealerships require full coverage car insurance when leasing or financing a vehicle. Some dealerships offer temporary coverage to let you drive home. Verify coverage before you buy a new vehicle.
It’s easy to get car insurance before buying a new vehicle.
If you already have an existing car insurance policy, then that policy should have a grace period on new vehicle purchases. Your existing policy covers your new car for a certain grace period – say, 7 to 30 days. Just inform your insurer within this grace period to maintain coverage.
Or, if you don’t have an existing policy, you can shop around for coverage today, then activate coverage the moment you purchase your vehicle.
Compare car insurance quotes online today to ensure you’re getting the best car insurance before buying your new vehicle.