Cars and Trucks

How Soon After Buying a Car Do You Need Insurance? Everything You Need to Know

If you’re thinking about buying a new car, you should also be thinking about insurance needs. In most cases, you may want to purchase an insurance plan before buying a new car to ensure that you have enough coverage.

How Soon After Buying a Car Do You Need Insurance?

It is usually best to buy car insurance before you get your new vehicle. If you already have car insurance for another vehicle, you may not yet have to buy another plan. Most insurance companies offer a short grace period in which your new car is covered. Depending on the dealership and if you are buying your new car with a loan, however, you may have to have proof of insurance before taking your new car home.

If you are buying a vehicle from a private seller, they will not usually request proof of insurance before leaving with the new car. However, you must keep in mind that driving without insurance is illegal and could end up costing you a lot in legal fees and even more if you are in an accident .

Getting Proof of Insurance for a New Car

If you are buying a vehicle from a dealership, then you will need proof of insurance before they allow you to leave with the car. In some cases, you may be able to call an insurance representative to find coverage right from the dealership. Also, if you already have insurance on a different vehicle, you may be able to show proof of that insurance. This is usually a requirement whether you are buying a used or new vehicle. Additionally, even if you choose a lease, you will still need proof of insurance.

Most insurance companies will provide you with quotes pretty fast and in most cases, you can usually get new insurance in 24 hours or less.

How Do I Know If I Have a Grace Period?

It is always important to read your policy and find out if, and what, your grace period covers your vehicle purchase. According to WalletHub, this grace period is usually from seven to 30 days and varies from one provider to the next. It is important to note that even if you do have a grace period, this only includes the level of coverage you had on your previous vehicle.

If you are buying a vehicle that is worth more, or if you’re taking out a loan, then you may be required to have full coverage, which includes comprehensive and collision coverage. Whereas basic insurance protects you if you damage someone else’s vehicle in an accident, full coverage also covers your damages and medical bills.

How to Update Your Insurance When Buying a New Car

If you currently have insurance and plan on staying with the same provider, then you will need to notify them that you are buying a new car. They will request certain information about your vehicle, including:

  • Vehicle identification number (VIN)
  • Purchase price

    If you are buying new insurance with a new provider, then you will need to give additional information, which may include:

    • Your name
    • Your address
    • Your driving record

      Once you provide your insurance company with the details of the vehicle that you’re buying, they will calculate your rates. Your premium may increase or decrease based on the value of the new car, as well as the value of your previous vehicle. The good thing is that you don’t have to stay with your current provider. If they raise your rates too much, or you want to see what other companies have to offer, you can always switch providers.

      All you need is the Vehicle Identification Number (VIN) of the vehicle and you can shop around for quotes, finding the best rates. If you do decide to go with a different provider, make sure you buy your policy before canceling your current one. Not only do you want to avoid driving uninsured, but new insurance companies may quote you higher if you have a gap in insurance coverage, as they will consider you to be a higher risk.

      Shop Around and Find the Best Rates

      If you’re in the market for a new insurance provider for a car you’re interested in buying, it is best to get quotes from a few different providers. You can either request quotes on your own or work with an independent agent who can provide you with multiple quotes from multiple providers. Here is some information you will need to get accurate insurance quotes:

      • Full names of all drivers who will be on the policy
      • Birth dates of all drivers on the policy
      • VINs for not only your new vehicle but any other vehicles on the policy
      • Social Security numbers of all drivers on the policy
      • Your address
      • A copy of the declarations page from your previous insurance company

        According to Policygenius, you should avoid driving your new car home altogether, unless you still have existing coverage. Otherwise, you risk getting a ticket, or worse, getting into an accident in which you are not covered. Insurance is required in most U.S. states. Driving without it can lead to your license getting suspended. Additionally, if you are in an accident and you are not currently covered, you may still be required to make payments on your vehicle, even if it is totaled.

        You may be left paying the other driver’s damages, as well as your own, out-of-pocket. Even if you live in one of the few states that don’t require insurance, you are still financially responsible for any damages that you cause in an accident, and without enough coverage, you could end up paying thousands of dollars for their repairs and medical bills.

        Buying your insurance policy before you buy a new car is ideal. This ensures that you know what to expect in rates, while also protecting you while you drive your vehicle home. It also gives you the opportunity to compare prices before choosing a policy.

        Check this out if you need additional information, resources, or guidance on car insurance.

        Sources:

        How Long do you Have to get Insurance After Buying a Used Car

        Do I Need Car Insurance Before I Buy A Car?

        New Car Insurance

        Cost for Comprehensive Car Insurance

        Car Insurance

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