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

Often, insurers provide a grace period of between two and 30 days before you need to adjust your policy for a new vehicle.

Stephanie Colestock
Stephanie Colestock

Stephanie is a DC-based freelance writer specializing in personal finance. Her work covers insurance, loans, real estate investing, retirement, and more.

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As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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Updated January 26, 2024

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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. 

Good to Know

If you’re buying a vehicle for the first time and don’t already have an auto insurance policy in place, you won’t have a grace period. Instead, you’ll need to buy a new auto insurance policy before you drive off the lot with your car.

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.

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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:

  • illustration card https://a.storyblok.com/f/162273/x/169fdfde11/liability-coverage.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/x/db598219e3/damage-from-aircraft.svg

    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).

  • illustration card https://a.storyblok.com/f/162273/x/665da91bf7/comprehensive-coverage.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/x/abffe6238f/financial-protection.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/x/5285c4cd74/uninsured-or-underinsured-motorist-coverage.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/100x100/9997698e9e/emergency-roadside-service.svg

    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

Here are answers to some of the most commonly asked questions about car insurance grace periods.

  • How long is a car insurance grace period?

    The car insurance grace period offered when purchasing a vehicle can range from two to 30 days, depending on the company and applicable state laws. To be covered by a grace period, drivers need to have an existing auto insurance policy in place before purchasing the vehicle.

  • Do all insurance companies offer a grace period?

    No. Not all auto insurance companies offer a grace period, and not all states require one to be offered. It’s important to check with your insurer to make sure that a grace period exists and confirm how long your newly purchased vehicle will have coverage.

  • Do you need insurance to buy a car?

    Yes. You must show proof of insurance before driving off the lot when buying a vehicle from a dealership. Even when buying from a private party, you still need to have insurance if your state mandates it or if you purchase the vehicle with an auto loan, depending on your lender’s requirements.

  • Can you drive home without insurance in a car you just bought?

    It depends. If you have an existing auto insurance policy, you can drive home with a car you just purchased as long as that company offers a grace period for coverage. If you’re buying a vehicle without an existing policy in place, you’ll need to buy coverage before driving off, either online, over the phone, from the dealership, or through an insurance agent.

Sources

  1. Kelley Blue Book. "Is It Legal to Drive Without Car Insurance?."
  2. Federal Trade Commission. "Vehicle Repossession."
  3. III. "Auto insurance basics—understanding your coverage."
Stephanie Colestock
Stephanie Colestock

Stephanie is a DC-based freelance writer. She primarily covers personal finance topics such as insurance, loans, real estate investing, and retirement. Her work can be found on CBS, FOX Business, MSN, Yahoo! Finance, Business Insider, and more. When she isn't helping people plan for their financial futures, she is traveling, hiking with her kids, or writing for her own website, TomorrowsDollar.com. She can be reached on Twitter @stephcolestock

Danny Smith
Edited byDanny Smith
Photo of an Insurify author
Danny Smith
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

Featured in

media logo
Konstantin Halachev
Data reviewed byKonstantin HalachevVice President of Engineering
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

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