Buying a Used Car When to Get Insurance
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Overall, if you plan to drive a car anywhere, you are going to want to have car insurance. You might be wondering "Do I need insurance before I buy a used car?" All drivers must meet the minimum insurance requirements in their state, so keep that in mind before you purchase any used car. If not, you could accidentally get in trouble with the law.
Shop for Insurance Before You Buy
It is always a good idea to get insurance quotes before you buy a car. It can be very discouraging to purchase a car and then realize that you cannot afford the insurance premium. Shopping before you buy will ensure that you don't get in over your head.
By searching online, you can view a variety of competitive quotes for auto insurance rates. That way you can make sure you're getting the most affordable coverage possible. When you've narrowed down your search, you should get personalized auto insurance quotes by providing your insurance provider with the vehicle identification number.
According to BuyAutoInsurace.com, sportier, flashier, and faster cars will cost you more to insure. If you find that your rates are not affordable, you may want to reconsider purchasing this type of car.
Are You Planning to Take Out a Loan?
If you're planning to take out a loan, you will likely need insurance coverage before your lender will give you money. Lenders usually require that you have the following coverage plans:
- Liability Coverage: this plan will pay for another person's medical expenses or car repair expenses when you're found at fault for an accident.
- Collision coverage: this plan will pay for any damages as a result of colliding with another vehicle or an object.
- Comprehensive coverage: this plan will pay for every other incident that causes damage besides a collision, such as a hail storm, fire, hurricane, etc.
Your lender has an incentive to make you have liability coverage and also physical damage coverage. The bank that is lending you money technically owns the car, and they want it covered in the case of an accident.
Are You Buying from a Dealership?
Autotrader tells us that many dealerships will not let you drive a car off the lot without proof of insurance. You may not be allowed to purchase a vehicle even if you pay with cash. If the dealership helped you with the funding, they are even less likely to let you buy a car without proof of insurance.
If you're planning to purchase your car on the weekend, you may need to get your insurance worked out first. Some insurance companies are not open on the weekend, which means you won't be able to add your new car to your plan until Monday.
Additionally, many dealerships provide customers with internet services. This will allow you to get insurance quotes while you're shopping.
Are You Buying from a Private Seller?
Purchasing from a private seller is possibly the only case where you will not technically need insurance to purchase a car explains the Truth About Insurance. However, this is only if you plan to buy the car with cash and not a loan. This is a private transaction, and you won't need to provide proof of insurance in most cases.
That being said, it is a bad idea to drive your new car home without car insurance. You are putting yourself at great financial risk if you choose to do so.
Get Inured Before You Buy a Car
Adding a car to your policy before you buy is the best move. Here are the simple steps you will likely need to take to get insured:
- Call your insurance agent
- Tell them that you plan to buy a car
- Provide them with the vehicle identification number
- Give them the start date or the day you plan to purchase your car
- Ask them for a confirmation of your coverage when it starts
Keep in mind that, if you choose to go this route, you need to be certain that this is the vehicle you wish to purchase. You will want to be completely sure that you have finished negotiations with the dealership before you confirm your new insurance policy.
Use Your Grace Period
Your insurance provider may allow a grace period for when you purchase a new car. A grace period is a length of time that your new car will be covered even though you haven't called an insurance agent and made it official. Allstate says that this will only work if the following is true:
- You already have an insurance plan with another vehicle
- You're paying with cash and not taking out a loan
- Your policy has a clause that allows a grace period
Your provider will transfer your coverage from a car you already have to your newly purchased one. Additionally, you will likely want to make sure that the policy that transfers is the correct one. For example, if you only have liability insurance on the previous car, that is all that will transfer over. You will have to specify that you want to add a comprehensive or collision plan if you would like those also.
The length of the grace period is different for every insurance policy, so you'll want to check with your agent. Keep in mind that if you don't notify your insurance provider during the grace period, you will be considered uninsured.
Lastly, it is important to note that your dealer may not let you buy a car even if you can show that you have a grace period.
Stay Covered
If you have any questions about insuring a new car, you can reach out to an insurance agent. They will guide you through the process and explain all the details of your specific policy.
Buying a car is a big life decision that requires time and consideration. Keeping these tips in mind will help you to stay fully covered when you are buying your new car. Getting insured can be easy as long as you have the right resources and knowledge.
Sources:
https://www.autotrader.com/car-shopping/buying-a-car-how-do-you-add-insurance-if-you-buy-over-the-weekend-225720
https://www.allstate.com/tr/car-insurance/buying-a-car-on-the-weekend.aspx
https://www.thetruthaboutinsurance.com/do-i-need-insurance-to-buy-a-used-car/
https://www.buyautoinsurance.com/do-you-need-insurance-before-you-buy-your-car/
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Buying a Used Car When to Get Insurance
Source: https://www.caranddriver.com/car-insurance/a31268491/do-i-need-insurance-before-i-buy-a-used-car/
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