Do I Need Car Insurance Before Buying a Vehicle?

By KBB Editors 01/21/2022 4:00pm

Customer with car insurance agent

Should you get your car insured before buying it? Technically, you can buy a vehicle without needing car insurance before taking it home in two states. But all other states require insurance before you buy a vehicle.

How Soon After Buying a Car Do You Need Insurance?

You will need to buy car insurance before purchasing your car. It’s illegal to drive without car insurance in every state except New Hampshire and Virginia. So, you will need to have at least the minimum liability insurance anytime you’re behind the wheel. Also, when you buy from a dealership and finance the car, the majority will not let you leave without it.

Check your state’s DMV for car insurance requirements before buying a vehicle, because relying on luck is not smart. Even driving once without insurance is a risk. You may have an accident on the road.

If you drive without insurance, you may have to pay for not just your repairs but those of the person you collided with. Worse yet, if anyone gets injured or dies, not only is it devastating, but the costs can potentially skyrocket.

At the end of the day, having some vehicle insurance is always better than having none. But how exactly do you go about it?

Can You Get Auto Insurance Without Owning a Car?

If you have a car insurance policy, it should cover you. However, you will need to get in touch with your insurance company or agent to inform them about your new car, so they can add it to your policy.

What if you’ve never had car insurance before? Don’t worry; you still have some options. First, you will want to compare insurance companies to see who can give you the best rate.

You can get in touch with your insurer of choice online, in person, or over the phone. However, doing it online may be the quickest option, and there is often a discount for purchasing coverage online.

When getting a quote, you’ll only need to provide general personal information, like your ZIP code and address, birth date, and name, plus some information about the vehicle, like the year, make, and model, to get accurate price estimates.

How Long Does it Take to Get Car Insurance?

It depends, but it’s possible to get your car insurance in just one day. Most insurance companies provide that service. Suppose you want vehicle coverage that soon. In that case, you need to have all of your information prepared beforehand, such as vehicle identification number (VIN), current insurance information, driver’s license number, and other personal data.

Keep in mind that it could take some time. So make sure you set aside the time in advance to get this done to avoid stress. Of course, the best-case scenario is when you don’t need same-day coverage, and everything goes smoothly.

Can I Buy Insurance Without a Car?

Yes, you can. Since it is illegal to drive without insurance, in most cases, you will have to buy insurance without technically owning the car. In instances like this, you will need to provide your personal information to your insurer and information about the vehicle. If you already know the exact car you will be buying, you will need to provide the make and model of the vehicle and the VIN.

Providing this will allow the insurer to provide you with adequate coverage so that you are set to drive off the lot legally when purchasing the vehicle. Since buying insurance is typically a very quick task, you can buy the insurance the same day or the day before you plan on buying the car.

What Kind of Coverage do I Need?

The vehicle insurance you will need depends on the situation you are in. For example, most lenders will insist on full coverage auto insurance. So, typically, you need to get full coverage if you are financing your vehicle.

Some of the most common types of car insurance are comprehensive, collision, and liability insurance. It is essential to review your specific needs when it comes to insurance. Depending on where you live, you may need insurance that covers natural disasters such as floods.

If you’re buying a used car, many states require specific coverage, so it’s wise to look into guidelines where you live.

Other than that, a combination of liability and collision or liability and comprehensive or even just liability insurance (which is not very wise) will work. That again depends on your personal preferences and the state where you live, which also may have requirements. Make sure you know what kind of protection is included in each type of auto insurance before you decide whether to get it or not.

Are the Rates for Full Coverage Auto Insurance Expensive?

Almost all lenders will require you to obtain full coverage auto insurance when buying a car. The full coverage includes collision, comprehensive, and liability insurance. When you fully cover your vehicle, you will have protection from all kinds of accidents or other damage such as theft or fire.

The average state cost for full coverage auto insurance will vary. The price depends on the state where you live, your driving record, and other variables. But in return, you will have the comfort of knowing that your car is completely protected from accidents caused by you or others.

However, you can estimate how much your car insurance will be before actually buying it. Calculating can give you an idea of what you will be paying when it comes time to add your different types of coverage.

Is There a Way to Save on Auto Insurance?

Yes. There are dozens of car insurance discounts. Here are a few of the best ways to save money on car insurance.

  • Shop around. The best way to save money on auto insurance is to shop around. Every company may charge a different rate for seemingly the same coverage.
  • Bundle. Insurance companies give discounts if you bundle multiple cars or your home and auto with the same company.
  • Safe driver. It pays to be a safe driver. Insurance companies tend to give discounts to drivers without fender benders on their records.
  • Telematics. Many insurance companies now offer telematics to track drivers and their driving habits. If you go for this option, you could save money on your insurance, depending on your driving habits.
  • Get good grades. Insuring teenagers can be costly. However, most companies give discounts to students who maintain a set minimum GPA.

What if I Want to Buy a Used Car?

Whether you buy a new or used vehicle, insurance is required in every state except New Hampshire. According to the state DMV, you’ll be financially liable if you don’t have the minimum insurance in Virginia, or you’ll need to pay the uninsured motor vehicle fee.

So, why risk getting into an accident and being uninsured? Driving without insurance coverage could cost you so much more when paying the bill out of pocket if something happens. Don’t assume that you will not get into an accident. It’s best to obtain insurance. The truth is, you never know what can happen and when.

Buying insurance for a used car is a quick and straightforward process. You can add a used car to your existing policy if you have one in most cases.

Remember, it’s always better to have some insurance than none, even if it’s not required by law. Do this for your safety and peace of mind.