It’s common for drivers to wonder whether they need insurance to purchase a used car. The answer is nearly always yes, as there’s never really a period when car insurance coverage is optional on either used or new cars. There are a few facets, though, to be aware of.
When buying insurance for a used or new car, you will likely want the best value for your dollar. Our team reviewed the industry’s major players and identified the best auto insurance companies overall. Make sure to compare quotes from various choices to find plans that suit your needs as you purchase a used car.
You Need Proof of Insurance To Purchase Any Car
The law in every state but New Hampshire and Virginia clearly says that you must have an auto insurance policy to drive a car. Getting behind the wheel while uninsured is illegal in all other states. Each location has unique minimum coverage requirements, and you will need to meet those specific standards when buying a car.
You’ll at least need liability insurance in most states to purchase a used car. In certain spots, minimum requirements say that your car insurance policy must have other types of coverage such as uninsured motorist insurance and personal injury protection as well.
You don’t need full coverage insurance to purchase a new vehicle, so it’s OK not to have comprehensive and collision coverage. Still, moving beyond liability coverage toward more extensive options such as gap insurance could end up saving you money despite higher overall car insurance costs.
Dealerships Won’t Let You Drive Off Without Insurance
Because of the legal requirement for insurance, car dealerships will require proof of auto insurance coverage before allowing you to purchase a used car. There is always the possibility that a dealership will neglect to ask for proof of insurance, but you’ll still risk legal consequences when you get caught.
If you end up financing a car, assume that the lender will require you to show proof of full coverage car insurance first to minimize their financial risk.
Those who don’t want to pay expensive car insurance rates can lower costs by increasing their deductible or by maintaining a stellar driving record or an excellent credit score.
You Risk Legal Consequences Without Insurance
As mentioned, it is a legal requirement to have auto insurance each time you take a new or used car home. The consequences for driving without insurance vary by state but include fines, jail time and your car potentially being impounded.
It’s a bad idea to assume that no one will realize that you got a car without insurance. If you are pulled over for a routine traffic stop or get into an accident, you will need to show proof of insurance. The police will discover that you don’t have the minimum requirements for your state and you’ll end up facing the legal consequences.
You Risk Financial Penalties Without Insurance
Carefully consider the financial consequences of not having insurance. If you get into an at-fault accident, you’ll likely be held responsible for covering the damages to both cars and the treatments for any injuries.
These costs add up quickly and can outweigh the cost of maintaining minimum coverage insurance on your vehicle. Don’t expect to save money by driving around uninsured.
Do I Need Insurance When Buying From a Private Seller?
Yes, you’ll need insurance even if you purchase a used car from a private seller. The only difference is that private sellers will typically be far less likely than dealerships to ask for proof of insurance before selling you the car.
This doesn’t change the legal requirement, though. It also doesn’t change the fact that you will be held financially responsible for damages in the event of an at-fault accident.
Is There a Grace Period for Buying Car Insurance?
The insurance requirement for buying a used car may seem strict, but there is some good news. If you already have auto insurance, your existing policy likely has a built-in grace period.
An auto insurance grace period is a short time frame when you are still covered after purchasing an additional vehicle. The length of the grace period depends on your insurance policy and provider, so ask your insurance agent to confirm its duration.
The car insurance grace period typically lasts between a week and a month. You’ll need to confirm whether there are necessary steps before you can take advantage of this grace period. Add insurance for the used car you purchased as soon as possible to make sure your vehicle doesn’t have a lapse in coverage.
How To Get Insurance Before Purchasing a Used Car
If you don’t have an active auto policy but plan to purchase a used car, know that insurance providers make insurance fast and easy to find. Many insurers even let you start coverage immediately.
You’ll want to compare multiple auto insurance quotes before buying a policy. Expect to provide basic information such as your name, address, driving history and driver’s license number. You will also likely need to provide information about the used car you want to insure including its vehicle identification number (VIN) and the car’s make, model and age.
Our Recommendations for Auto Insurance
No matter the situation, the best way to find free insurance quotes from various providers is with a comparison tool. We recommend considering GEICO, USAA and State Farm, but it’s best to compare quotes before choosing a new car insurance company.
GEICO: Best Overall
GEICO earned 9.1 stars out of 10.0 in our overall industry review. That’s because of the company’s wide-ranging coverage plans which typically come at reasonable rates for used cars. Notable auto insurance discounts from GEICO are offered for having specific safety equipment, for using defensive driving techniques, for good students and after emergency deployments.
USAA: Best Military Provider
Motorists who are military members, veterans or related to those in the military often turn to USAA for coverage. The company is known for having top-tier customer service along with affordable premiums on most used vehicles. Remember that eligibility is limited from USAA, though.
State Farm: Best Student Discounts
State Farm offers the largest good student discount in the car insurance industry at 25%. It also has multiple additional ways to save such as the Steer ClearⓇ and Drive Safe & Save™ programs. Drivers often enjoy using State Farm due to its easily accessible insurance agents.
Frequently Asked Questions
How long do you have to get insurance after buying a used car?
Most states require proof of insurance before you can even drive a used car off the dealership’s lot. If you already have insurance for a different vehicle, you typically have anywhere between a week and a month to add your newly purchased used car to the policy.
Do I need insurance before I buy a used car?
Legally, you need insurance before purchasing a used car in nearly every state. You may get around this by buying from a private seller, but expect to be fined or to potentially face jail time if you are pulled over and caught driving without insurance.
Can I buy insurance before purchasing a car?
Yes, you can buy auto insurance before buying a car. However, you’ll usually need details such as the VIN of the specific vehicle before actually purchasing the new policy.
Can I buy a car without insurance?
Whether a car is new or used, you cannot legally purchase it without insurance in most states. Dealerships regularly enforce this law by asking for proof of insurance.
Methodology
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, auto insurance rate estimates generated by Quadrant Information Services, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.
