Do You Need Insurance Before the Dealership Lets You Leave?
Last Updated on March 11, 2023
If you just bought a car from a dealership, then you need car insurance.
To legally drive on public roads in the United States, you must have car insurance. Before you drive a car home from a dealership, the dealership may require you to provide proof of insurance.
How does car insurance work with new vehicles? Should you buy car insurance through your dealership? Keep reading to discover everything you need to know about how insurance works when leaving the car dealership.
Table of Contents:
- Most Dealerships Require Proof of Insurance
- How Insurance Works with New Vehicles
- Shopping for Car Insurance Before Buying a New Car
- Your Car Insurance May Have a Grace Period on New Vehicles
- How to Buy Car Insurance Without a Car
- Can I Drive a New Car Without Insurance?
- How to Buy Same Day Car Insurance
- How to Provide Proof of Insurance to the Dealership
- Lenders Require Full Coverage Car Insurance
- I Purchased a Vehicle and Don’t Have Insurance: What Now?
- Do You Need Insurance for Used Vehicles?
Most Dealerships Require Proof of Insurance
Most car dealerships require proof of insurance before you leave the lot.
Before taking home your new vehicle, you need to provide proof of insurance to the dealership. Once you provide proof of insurance, the dealership allows you to take possession of the vehicle and drive it home.
How Insurance Works with New Vehicles
If you just bought a new vehicle, then you need car insurance for that vehicle. Sometimes, your existing policy extends to cover new vehicles for a certain grace period.
Alternatively, other drivers buy car insurance before buying a new vehicle. You might contact an insurer and buy coverage that starts on the date you take possession of the vehicle, for example.
Shopping for Car Insurance Before Buying a New Car
If you don’t already have car insurance, then you need to buy a policy before taking possession of your new vehicle.
Fortunately, insurers make it easy to shop around for car insurance – even if you don’t have a vehicle. You can compare quotes, buy car insurance online, and arrange for that car insurance policy to begin the date you take possession of the vehicle.
Your Car Insurance May Have a Grace Period on New Vehicles
If you already have car insurance, then your car insurance policy may have a grace period for new vehicles.
This grace period allows you to temporarily cover a new vehicle for one to two weeks before needing to officially add the new car to your policy.
If you can provide proof of existing coverage to your dealership, and you can prove your car insurance covers new vehicles with a grace period, then the dealership should allow you to drive off the lot.
How to Buy Car Insurance Without a Car
You can shop for car insurance coverage without owning a car. If you are preparing to buy a new car, then you can shop for auto insurance policies even without a vehicle identification number (VIN).
Request a car insurance quote online from multiple providers. Insurers ask for your name, age, and other identifying information. They also ask for your address, your driver’s license number, and your Social Security Number.
After providing this information, the insurer may ask for a VIN. Because you don’t have a VIN, you leave this section blank. Most insurers offer quotes based on the make and model of the vehicle you plan to buy.
Once you know the VIN of the vehicle you are buying, you can provide this information to your insurance company.
The next step is to make sure your new policy starts on the date you take possession of your vehicle. Car insurance coverage begins at 12:01am on the date listed on your policy. If you are buying your vehicle on July 1, then you need your car insurance policy to begin on July 1 to maintain coverage.
Can I Drive a New Car Without Insurance?
If you just bought a new car, then you may be tempted to drive it without insurance.
There are three problems when driving a new car without insurance:
- Most dealerships will not allow you to leave the lot without providing proof of insurance
- Most states require you to carry minimum liability coverage
- Even if your state does not require insurance, you are still financially responsible for any damage you cause to other people and property
For all of these reasons, it’s a good idea to buy car insurance for your new vehicle.
Car insurance is not required in some states, including New Hampshire. However, New Hampshire still requires drivers to pay for any damages they cause. If you injure someone or damage someone’s vehicle when driving, for example, then you need to cover all associated costs. Typically, insurance would cover these costs. Without insurance, you need to pay these costs out of pocket.
Of course, car insurance also covers damage to your own vehicle. If you crash your new car and don’t have insurance, then you could be out of luck: you need to pay for any repairs out of pocket, and insurance will not cover you.
How to Buy Same Day Car Insurance
Some drivers buy same-day car insurance when they take possession of a vehicle. Same-day insurance is also called “drive-away insurance.”
Typically, it’s easy to get same-day car insurance. You contact an insurer, provide the insurer with all of the information they need, and buy coverage that starts as soon as possible.
Shop around for same-day car insurance quotes to ensure you have appropriate coverage for your new vehicle.
How to Provide Proof of Insurance to the Dealership
Dealerships typically require you to show proof of insurance when purchasing a new car.
You can provide any of the following types of proof:
- Have your insurer fax or email proof of insurance to the dealership
- Show the dealership your insurance card
Lenders Require Full Coverage Car Insurance
If you are buying a car with cash (i.e., not leasing or financing the vehicle), then you only need liability insurance on that vehicle. However, if you are leasing or financing a vehicle, then the lender will require full coverage car insurance, which includes comprehensive and collision coverage.
Your dealership may require proof of full coverage car insurance before you leave the lot.
Your car is the collateral in the loan. The dealership needs to protect that investment. Although your state only requires liability coverage, your dealership may require full coverage car insurance.
Similarly, if you are financing your new car through a bank or another financial institution, that lender will also require proof of full coverage car insurance.
I Purchased a Vehicle and Don’t Have Insurance: What Now?
If you purchased a vehicle and don’t have insurance, then you still own the vehicle – but you need to get insurance before driving it away from the dealership.
In this case, you can leave the car at the dealership, purchase car insurance, and return with proof of insurance. You should be able to buy car insurance on the same day. However, you may need to leave the car at the dealership overnight or for several days.
Do You Need Insurance for Used Vehicles?
If you are buying a used vehicle from the dealership, then the same rules apply. The dealership requires proof of insurance before you drive away with the vehicle.
If you are buying a used vehicle for cash and are not leasing or financing the vehicle, then the dealership will only require proof of liability coverage. If you are leasing or financing the used vehicle, however, then your dealership will require proof of full coverage car insurance.
If you’re buying a used vehicle from a private seller, then the private seller is unlikely to ask you for proof of insurance. However, you still need car insurance to drive on public roads in most states.
Final Word
It’s illegal to drive a car without insurance. If you buy a car from a dealership, then the dealership requires proof of insurance before you leave.
If you already have car insurance, then your policy may have a grace period that covers new vehicles for one to two weeks. Alternatively, some drivers buy a temporary policy or same-day car insurance.
Shop around for car insurance to find the best coverage for your new vehicle. Then, bring proof of that insurance to the dealership. The dealership will not let you leave without proof of insurance.
