In almost every state, drivers who own a registered vehicle are required to carry car insurance. New Hampshire and Virginia are the only states that do not mandate traditional car insurance and instead require other forms of financial responsibility. If you are in the market for a new car, you should know that you will need an active car insurance policy to purchase any vehicle, whether from a dealer or a private seller.
Do you need insurance to buy a car?
If you’re wondering, “Do you need insurance to buy a car?” the short answer is yes. However, you do not necessarily need to have a policy before the actual transaction takes place. In fact, it would be difficult to purchase insurance until you know exactly which car you are going to buy. When you apply for car insurance, the insurer will need vehicle-specific information like the VIN number and mileage.
Although buying a car without insurance is technically possible, you will need to show proof of insurance before you can drive the vehicle off the lot. If you purchase a car at a dealership, the salesperson will probably ask to see proof of insurance on the vehicle during the transaction. Without an active policy, you would not be legally allowed to leave with the car even if you pay cash.
Do I need a new policy for my new car?
In order to buy a car, you do not necessarily need a new policy. If you already have car insurance, you can probably add the new vehicle to your existing policy. This can be done through your insurance company’s mobile app or the online customer portal, which you can do while you are waiting at the dealership.
In addition, your existing policy might offer a grace period, which will automatically cover a new car for a limited period of time before you have to officially add it to the policy. Car insurance grace periods are typically up to 30 days, but before you visit the dealership, make sure to confirm with an agent so you know how long the car is covered.
If you do not already have car insurance, you will need to purchase a new policy. Most car insurance companies make it easy to apply for coverage and purchase a new policy online or through a mobile app.
How do I get insurance for my new car?
Getting car insurance for a new vehicle is relatively simple. If you already know which vehicle you are going to purchase, you can get a policy (or update your current coverage) at home or at the dealership. You do not have to wait until the car is officially yours.
When you apply for a policy or add a new vehicle to your current policy, you will typically need to provide information about the vehicle, including the VIN number, make, model and year, mileage, color, how the car will be used and your average annual mileage.
Once the policy is updated, you will want to make sure the effective date is the day of the vehicle purchase. The policy needs to be active at the day and time of the purchase in order for you to legally drive the car off the lot.
At some point during the purchase process, an agent will ask to see your proof of insurance on the new vehicle. They will probably request to see the insurance binder, which includes your coverage options, policy limits and deductibles.
If you rely on the grace period from your existing auto policy, you will also need to show documentation. As an alternative, the car salesperson might ask to speak with an agent from your insurance company to verify that your new car will be covered before you leave.
What if I am not buying from a dealer?
Private car sales are becoming increasingly popular, as they often allow drivers to find much better prices than a dealership might offer. If you decide to buy a vehicle from a private seller, you will still need car insurance. The only difference is that the seller is not obligated to verify your coverage before you are allowed to drive off.
Your current car insurance policy will most likely extend coverage through the grace period, even with a private sale vehicle. But if you do not already have coverage, you will need to purchase a policy before you can drive the vehicle home.
Although the seller may not ask to see proof of coverage, driving without insurance still has legal and financial ramifications. You could get pulled over while driving home, which could lead to a number of serious consequences if you do not have proper coverage.
Frequently asked questions
What is the best car insurance company?
There is no single best car insurance company because the best provider is different for every driver. It depends on where you live, what type of coverage you need, how much coverage you want, what discounts you can qualify for and more. Shopping around and comparing providers can help you see which company meets your unique needs.
How much does car insurance cost?
In the U.S., the average cost of car insurance is $1,674 for a full coverage policy. However, every driver pays a different rate. You might pay more or less than the national average based on your state, ZIP code, credit score, claim history, driving record and the type of car you have.
How much car insurance do I need?
As with most states where car insurance is legally required, you will have to carry a minimum amount of coverage in order to drive legally. Most states require liability insurance, and if you live in a no-fault state, the requirement typically calls for personal injury protection (PIP). However, if you lease or finance your vehicle, most lenders will require you to carry a full coverage policy, which includes liability as well as both collision and comprehensive coverage.