How Long Is the Car Insurance Grace Period When You Buy a Car?

If you replace your existing car, your current auto insurance policy will typically offer a grace period during which your newly purchased car is covered, even if you haven’t yet added it to your policy. The length of this grace period can depend on the insurance company and state, so it’s important to confirm your coverage before driving your new car off the lot.

Read on to learn more about the used car insurance grace period and how to update your current coverage or buy a new policy for a recent vehicle purchase.

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How long can you wait to insure your used car?

You’ll typically have between two and 30 days to add a used car to your auto insurance policy after completing your vehicle purchase, though some car insurance companies may only give you two or three days.^[1] Certain states don’t require a grace period at all, so the length of time allowed will depend on your insurer.

This time frame typically applies whether you purchase a new or used car to add to your policy or even replace an existing vehicle with something else. 

While a car insurance grace period does give you a few days (or even weeks) to complete the process, it’s imperative that you add your newly purchased vehicle to your auto insurance policy as soon as possible.

Failing to do so before this grace period ends can mean that you’ll be driving without auto insurance coverage. Not only is this illegal in most states, but it can also put you at risk of financial liability if your vehicle were in an accident.

If you used an auto loan to purchase your vehicle, failing to have full-coverage auto insurance might even result in a repossession of the vehicle.^[2]

What is a grace period in car insurance?

A car insurance grace period is the amount of time an insurer allows before you must update your auto insurance policy after purchasing a vehicle. The length of this grace period depends on both your state laws and your insurance company’s policies.

How does a car insurance grace period work?

During a car insurance grace period, your policy will generally protect your new vehicle with the same coverage limits as your previous vehicle or any other vehicles on your policy.

Assuming you already confirmed the length of your grace period before (or shortly after) buying the car, you should call your company during this time to see how much your premiums will change when adding your newly purchased vehicle to the policy.

This may also be a great time to get quotes from other companies to see how prices and coverages compare. If you find a better price elsewhere, you may even choose to switch insurers.

Does car insurance always have a grace period?

Your current insurance may have a grace period, or it might not. Grace periods can vary according to your location and the terms of your insurance company. Certain state laws may mandate a specific period of time, while other states have no such requirement. Some insurance companies may even offer an extended new car insurance grace period beyond what’s required in your state.

If you’re a first-time car buyer and don’t already have active auto insurance coverage, your new purchase won’t be protected by a grace period. Instead, you’ll need to show proof of coverage before leaving the dealership with your vehicle, which may mean buying a policy online or over the phone before completing your transaction.

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How to get insurance for your used car

Buying auto insurance coverage for a used car can be a relatively quick and easy process. Many car insurance companies allow you to shop around and get quotes for coverage online, and you may even be able to buy your new policy with just a few clicks.

When you buy from a dealership

Before leaving a dealership with your new car (whether it’s brand-new or new to you), you’ll need to show proof of insurance coverage. This can be in the form of a current policy, under which you’re covered by a grace period, or a brand-new policy that you just purchased for this specific car.

If you already have a valid insurance policy with at least state-minimum liability insurance coverage, showing a copy of your insurance card will typically suffice. If you don’t already have insurance coverage when you’re buying a vehicle, you’ll need to either shop around and purchase a policy from an insurer, or you can consider buying coverage through the dealership directly (if offered).

When you buy from a private individual

When you purchase a used car from an individual, they’re not legally required to confirm proof of insurance the way that a dealership would be. However, this doesn’t mean that you shouldn’t still have adequate insurance coverage before driving off, even when buying from a private party. If you’re in an accident during a test-drive or immediately after you buy the car, you can still be held liable for any damages.

In this case, you have a few different options. You can complete the sale under the umbrella of an existing auto insurance policy, opting to add the vehicle to your policy before your grace period ends. You can also purchase new coverage on the spot (online or over the phone) before driving off with your new vehicle.

Even though a private party seller won’t confirm that you have adequate coverage, you’ll still need to meet any requirements set forth by your lender and state laws.

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Types of insurance you need for a used car

Whether you’re buying a used or new vehicle, you should consider a few different types of auto insurance coverage. Here’s a rundown of each and why you might want to add them to your next policy:

• 

  Liability coverage

  Liability insurance is mandated in most states and offers protection to other drivers if you’re at fault for an accident that causes bodily injury or property damage to someone else. This is the bare-minimum coverage you should add to your vehicle, though it doesn’t protect you or your car in any way.

• 

  Collision coverage

  Collision insurance pays to repair or replace your vehicle if it’s in an accident that’s either your fault or has no other at-fault driver (such as hitting a stationary object or a hit-and-run in the middle of the night).

• 

  Comprehensive coverage

  With comprehensive coverage, your vehicle is protected against loss if non-collision damages occur. This could include theft, vandalism, falling tree limbs, or even hitting an animal on the road.

• 

  Personal injury protection coverage

  Also known as PIP insurance, personal injury protection covers you and your passengers for medical bills, lost wages, and more if you incur injuries from an accident, regardless of fault. PIP coverage is required in some states and allowed as an optional add-on in some others.

• 

  Uninsured/underinsured motorist coverage

  If an uninsured driver hits you, or the at-fault driver doesn’t have enough coverage to pay for your injuries or damages, your own uninsured/underinsured motorist coverage can step in to compensate you.

• 

  Roadside assistance coverage

  With roadside assistance coverage, you can request help if your vehicle is disabled due to a flat tire, dead battery, empty gas tank, or other mechanical issue. Some companies provide roadside assistance as a complimentary feature, while others may charge extra for the service.^[3]

Used car grace period FAQs