No matter where you live, you will have to have insurance in order to buy a car. It is illegal to drive without insurance, so a dealership won’t let you take your car off the lot without it. This article will help you learn what you can do if you don’t currently have insurance and want to get a car.
Can I Get a Car Without Insurance?
No, it is not possible to get a car without insurance. It is illegal in every state (except New Hampshire) to drive without insurance. Be aware that you are responsible for all damage you cause in New Hampshire if you don’t have insurance.
Because of state laws, dealerships won’t even let you drive a car off the lot without insurance. This rule applies whether you purchase a brand-new car or a used car.
You may think you can get around this rule by getting a car from a private seller and paying in cash, but this is not the case. You will still have issues without insurance because to transfer the title, the seller will have to do so via the Department of Motor Vehicles (DMV). The DMV will see that the title is in your name and fine you if you don’t have insurance.
What Insurance You Need If You Pay Cash
Even if you pay for a car in cash, you will still need auto insurance coverage. The dealer requires this because the dealer must submit the paperwork to the DMV for the sale.
The good news for those in search of cheap insurance is that if you pay in cash, you just need to get your state’s minimum coverage. This can save you money upfront. However, remember that the minimum coverage will not pay to fix your vehicle if you crash into an object or cause an accident.
The Insurance Information Institute (III) maintains a list of minimum insurance requirements by state. To give you an idea of what to expect, consider that many states require bodily injury liability and property damage liability coverage. These include Alabama, Arkansas, Colorado, Georgia and Mississippi, among others.
Some states also require personal injury protection or MedPay, such as Pennsylvania and Oregon. Some also require underinsured or uninsured motorist coverage. Examples include Oregon, New York and North Carolina.
What Insurance You Need If You Finance
If you choose to finance your car instead of paying for it upfront in cash, you will need to get full coverage instead of the minimum coverage. This is typically a requirement directly from the lender issuing your car loan.
Full coverage includes liability insurance, collision coverage and comprehensive coverage. This combination ensures that any damage to the car, whether from an accident you cause or from the environment, will be covered. This lets the car owner – in this case the lender – protect their investment.
What Deductible Do You Need If You Finance?
Most lenders require not only that you have full coverage but that your chosen auto insurance policy has a deductible of $500 or less. That requirement is because the lender wants to ensure you can afford to get your car fixed and that your financial responsibility isn’t too great.
Some insurance policies will offer higher deductibles, up to $1,000 or $1,500. However, few lenders will accept these policies because they don’t want to risk you not being able to pay such a high deductible.
You can typically lower your deductible by increasing your insurance premiums.
How to Get Insurance to Buy a Car
The good news is that it’s incredibly easy to get auto insurance quotes and buy your policy online. This makes the process of getting insurance before buying a car easy to do from home.
To make the process more smooth, have your bank card or info ready before calling an insurance agent or signing up for a policy online, as they will require upfront payment.
The process is incredibly streamlined today. This makes it possible to get auto insurance even if you only just decided to get a car. In that case, you will appreciate that your insurance company can email or fax the dealership with proof of insurance. It can typically do so within minutes of you buying a policy so there is no delay.
What If You Have Insurance on Another Car?
If you already have auto insurance coverage on another car, the process can be even easier. Most policies will give you a grace period for new cars. This grace period means that your insurer will cover your new vehicle for 15 to 30 days after its purchase. You can use that time to officially add the car to the policy.
While this grace period is automatic, there are some situations where you’ll have to contact your insurance company sooner. For example, consider if your old car was totaled or you sold it. Your current policy will likely cover your new vehicle for the remaining time on the old policy. However, you will still need to contact the insurer to let them know that you are switching vehicles.
In this case, however, you can still typically just show your dealership and/or lender your current car insurance policy and be fine.
Our Recommendations for Auto Insurance
Our experts recommend you consider auto insurance from GEICO, USAA or Progressive, all of which are highly rated.
GEICO: Best Overall
Our team awarded GEICO an overall rating of 9.1 out of 10.0. This includes an 8.5 for coverage, a 9.4 for cost, a 9.0 for customer experience, and a 9.8 for industry reputation. GEICO has an extensive list of discounts available, including those for good students, federal employees, emergency deployment and a range of automotive safety and anti-theft features.
USAA: Best Military Provider
USAA earned an overall rating of 9.6. This includes a 9.3 for industry reputation and customer experience, a 10.0 for cost, plus a 9.5 for coverage. USAA offers some great discounts, including for vehicle storage, good student, new vehicle, multiple vehicle and safe driving.
Progressive: Best for High-Risk Drivers
Progressive also earned an 9.1 out of 10.0. It earned a 9.1 for industry reputation, a 9.0 for coverage, a 9.3 for cost, and an 8.9 for customer experience. Progressive offers its own discounts, including those for continuous insurance, teen drivers, homeowners, signing online and going paperless.
FAQ: How to Get a Car Without Insurance
Can you drive a car without insurance if you just bought it?
No, you can never drive a car without insurance in 49 states, even if you just bought it. In New Hampshire, you can drive without insurance, but you are responsible for all damage you cause. There are also penalties for causing an accident without insurance.
What consequences will I get for driving without insurance?
In the best-case scenario, driving without insurance will only lead to a fine. You may also face jail time, community service, vehicle impoundment and/or a suspended driver’s license.
How long do you have to insure a car after purchase?
Your car must be insured before you drive it off the dealership lot. Your dealer will not let you drive it off the lot without insurance. If you have a current policy, you will likely have coverage via a grace period of 15 to 30 days after your purchase. You must contact your insurer to transfer coverage within that time.
How can I buy my first car without insurance?
It is not possible to buy a car without insurance. Luckily, getting insurance is straightforward and there are affordable options available.
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.
