8+ years writing for major outlets, including MarketWatch and Business Insider
Master’s in Education
Taylor Mlam-Samuel is a personal finance writer and credentialed educator. When she’s not helping readers better save and spend money, she can be found teaching.
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
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You can sometimes buy a car without auto insurance, but you can’t drive without carrying your state’s required minimum coverage. Drivers without existing car insurance must provide proof of coverage before buying a car. But if you already have coverage on another vehicle, you might have a grace period of one to four weeks.[1]
Grace periods vary widely by state and insurers, so it’s important to add your new car to your policy right away. Here’s a closer look at how insurance works when you buy a car.
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Why you need insurance to buy a vehicle
Car insurance is a legal requirement in every state but New Hampshire. Coverage requirements and amounts vary from state to state, but you typically need liability coverage. When you get a new car, you need a policy before you can drive it.[2]
If you buy a used car from a private owner, you can generally complete the sale without proof of insurance. But you won’t be able to put the vehicle on the road without insurance. When you buy a car from a dealership, you must have proof of coverage before driving off the lot. If you’re financing or leasing a vehicle, your lender will also require coverage. Ask your lender how much coverage you need.
Shopping around to compare rates can help you find the best policy to fit your needs and budget. You can do this if you’re buying a new policy or have an existing policy but are considering a switch. Once you find a policy that works, you’ll need the new vehicle’s VIN to finalize coverage.
Do you need a new policy if you have existing coverage?
If you already have coverage, you need to update your policy, whether your new car is replacing your existing vehicle or just being added as an additional car. You won’t need a new car insurance policy unless you decide to switch insurers.
Most insurers offer a grace period that allows you to wait a few weeks to add the new car. The amount of time varies from one insurer to the next, and it can be as little as a few days. So it’s essential to check in with your insurer before buying a car. During the grace period, your current policy covers your new vehicle.
Once you’re ready to update your policy, complete the following steps:
1. Contact your insurance company
Call your insurer to begin the process and update the coverage. Some companies also offer the option to add a vehicle online or through an app.
2. Provide vehicle information
You typically need information about the new car, including its make, model, mileage, and VIN.
3. Pay the new premium
If the new car increases the cost of coverage, you’re responsible for paying the price difference after you add it to the policy.
What to do if you’re trading in your car
When you trade in your current car and purchase a new one, you need to update your insurance policy. Contact your insurer to remove the old car and add the new vehicle.
Car insurance companies usually offer grace periods, which allow you to use your existing policy to cover your new car for a limited time. The grace period applies automatically, and you don’t need to do anything to activate it. But the amount of time varies depending on the insurer — usually one to four weeks.
If you want to change insurance companies, schedule the cancellation of your current policy for the trade-in date. You’ll need to make sure you have new coverage set up for the same day since you can’t drive your new car without it.
How to buy car insurance
You might need to buy a new car insurance policy if you don’t have an existing policy, or you might decide to change insurers when you purchase a new car. Either way, you’ll need to complete the following steps:[3]
Consider coverage options. Your insurance coverage must meet the state’s minimum requirements. But you can also add additional coverage or increase the limits. Consider how much coverage you need, including comprehensive and collision, which your lender might require when financing.
Compare quotes. Get quotes from at least three insurers to find the best deal before finalizing coverage. Comparing quotes is an easy way to save money since prices vary depending on the company, even if the coverage is the same.
Gather vehicle information. You need to provide the make, model, mileage, and VIN for your new vehicle. Once you know which car you’re buying, you can get all the information from the seller.
Buy the policy. Finalize your coverage details, including optional coverages like gap insurance and roadside assistance. Determine what date coverage begins and prepare for your monthly insurance payment.
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Coverage options for new vehicles
You must have insurance coverage that meets the minimum requirements for your state. Every state except New Hampshire requires liability insurance, which helps pay for vehicle repairs and medical bills when you cause an accident. But it doesn’t cover any of your costs.
Because of that, most insurance experts recommend that drivers purchase additional coverage. Plus, your lender or financial institution might require it if you use a lease or loan to finance your purchase.[4]
If you’re purchasing a new or used car, consider the following optional coverages:
Collision coverage
Collision insurance helps pay for vehicle repairs when you hit an object or car. It’s part of a full-coverage insurance policy. It’s a good idea to add this coverage for new and used vehicles
Comprehensive coverage
Comprehensive insurance pays for repairs when theft, vandalism, natural disasters, or other non-collision events damage your car. It’s helpful for both used and new cars and is part of a full-coverage policy.
New car replacement coverage
This coverage pays for the cost of a new car if your current car is totaled within the first year. It protects against new vehicle depreciation, so it only makes sense for new cars.
Gap coverage
Gap insurance pays the difference between the value of your car and what you owe on it if you total it or someone steals it. This coverage is a solid option if you finance a new car, but it’s not necessary for used vehicles.
Roadside assistance coverage
Roadside assistance coverage helps pay for mechanical and towing aid if you’re stuck on the side of the road. You can use the coverage for flat tires, dead batteries, and towing.
Buying a car without insurance FAQs
Buying a new car is exciting, but it can also raise questions about insurance requirements. The following answers can help you navigate insurance as a new car owner.
Can you buy a car in the U.S. without insurance?
You can buy a car in the U.S. without insurance, but you can’t drive it without coverage. Most dealerships require drivers to show proof of insurance when buying a car.
How long do you have after buying a used car to get insurance?
Drivers with an existing insurance policy usually have a grace period of one to four weeks. During that time, your current policy covers the car. If you don’t have an existing policy, you must establish coverage before driving your newly purchased car.
Does USAA offer non-owner car insurance?
Yes. USAA offers non-owner car insurance policies for members who don’t own a car. The coverage is the same as an owner’s policy, and you can customize coverage. The only difference is that it’s a “named insured” policy, so it only covers the person listed on the policy.
How do you buy insurance for a car you haven’t purchased yet?
You can get quotes and shop for coverage once you know the make and model of the car you want to buy. You must have the VIN to finalize coverage, but comparing rates can help you save time and be prepared before you buy the car.
Do you need insurance to test-drive a car?
You don’t usually need insurance to test-drive a car at a dealership. Most dealerships only require a valid driver’s license. But requirements can vary depending on the dealership and location.
Taylor Milam-Samuel is a writer and credentialed educator who is fascinated by how people earn, save, and spend their money. When she's not researching financial terms and conditions, she can be found in the classroom teaching.
Taylor has been a contributor at Insurify since February 2023.
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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