Do You Need Car Insurance To Buy A Car In 2020?

Feb 29, 2020 (0) comment

do you need car insurance to buy a car

Yes, you do need car insurance to buy a car!

And to be honest:

Whether you buy your car with cash or financing, new or used.

If you want to drive your vehicle to your house after you buy it, you must come armed with a plan for car insurance. 

do you need car insurance to buy a car

In this post today I will go over if you need car insurance to buy a car and the fastest ways to get car insurance if you need it.

​In This Article



Can You Buy A Car Without Insurance? 

No. It does not matter whether you purchase your car from a dealer or buy your car from a private seller. 

You still need car insurance to buy a car. Period. 

If you are purchasing your car from a dealer, the dealer will require you to provide them with proof of insurance.

Without that proof, you will not be able to leave the dealership and drive the car off the lot. 

Well, what insurance is required to buy a car from a private seller? You are probably paying the private seller with cash. Does that change things? No. 

The seller can submit a release of liability request as soon as you sign for the car. That release has your name on it as the new owner.

What that means is that if you drive the car, you are liable for complying with all state regulations, including insurance requirements. 

How Do You Get Car Insurance Without A Car?

The best way to get car insurance without a car is to start your research. You can do this when you’re researching what kind of car you want to buy.

Insurance prices will vary based on the car you buy and where you live. Why not save time and research cars and insurance plans together? 

When you put together quotes from different car insurance companies, look up the make and model of the car you want. 

This research will give you a realistic sense of what it might cost.

You can also see how changing the type of car you buy changes what you will need to budget monthly for your car payment and insurance. 

If you know what car you plan to purchase, you can ask the dealer to give you the (VIN) (vehicle identification number), and that will get you the most accurate insurance quote. 

Can I Drive A Car Without Insurance If I Just Bought It?

Whether or not you can drive a car without insurance, you should not. If you drive without car insurance where it is legally required, and you are caught—or worse yet, are involved in an accident—the consequences can range from serious to life-altering. 

Some potential consequences: 

  • Loss of driver’s license (suspension)
  • Heavy fines
  • Lawsuits for damages resulting from an uninsured accident 

Even if your state does not require insurance, you should not drive without it. All states except New Hampshire require liability insurance. 

Virginia is a bit more specific—you can forego the insurance, but only if you pay a high fee. 

If you do choose to drive a car without liability insurance and you hit another vehicle, you will have to pay for all of the other driver and passenger’s medical bills and any car repairs needed. 

Medical expenses can be astronomical—far more than monthly insurance payments. 

Another reason to wait until you have car insurance is that a lapse in coverage does not look good to insurers. 

A lapse in coverage indicates that insuring you might pose a higher risk for the company. In turn, your premium will go up. 

How long do I have to add a new car to my insurance policy?

If you already have a car insurance policy, your process may be much simpler. You can call your insurance company and ask them about grace periods. 

A grace period is an amount of time where a limited coverage is extended to a new vehicle before you add it to the policy.

Grace periods are good options. However, they are not all the same length. 

If your car insurance company does offer grace periods, make sure to find out how long yours lasts. They can be anywhere from one week to 30 days. 

Before you leave the dealer, confirm that you qualify for the grace period. And do not forget that it is temporary. 

You still need to call your insurance company and officially add your new car to your plan. That way, you can ensure that you have the appropriate coverage. 

Can you get car insurance on the same day?

Yes, it is simple to get car insurance the same day. It will be fastest if you gather some material ahead of time. 

You will need: 

  • The driver’s license numbers of any drivers in the household
  • The birthdays and names of all drivers 
  • If you have it, the VIN for your new vehicle 

Having all of the materials in one place will make it easier to tell the agent what you need.

If you already know which company suits your car insurance needs and want simplicity, you can complete the necessary forms online. 

car insurance for buying a car

What's the difference between gap Insurance & car insurance?

If you are financing or leasing a car, you might also consider buying gap insurance. 

Gap insurance provides for the ‘gap’ between what you owe on a vehicle and what it is worth at the time you are involved in an accident.

The minute you drive off a dealership lot, your car value depreciates, and it is worth less than you paid for it. 

If you are in an accident, you are still responsible for your lease payments or your loan payments. 

Gap Insurance coverage is in addition to your car insurance. If the amount the insurance company pays is not enough to cover your loan, gap insurance might make up the difference. 

Because it is coverage that mainly works with loans and leases, you might see it referred to as loan/lease gap coverage.

It is only an option for someone who is the original leaseholder or owner of the loan.

​Taking Action

Although you might be burning with excitement and want nothing more than to hit the road, it is important to get car insurance before you get behind the wheel of your newly purchased car. 

You will need insurance to buy a car with cash. You certainly need insurance to buy a car from the dealer. You need insurance to get a car loan.

Do your homework and come prepared and if you are in the middle of this process you don’t want to waste any time.

Get you a few quotes by clicking here or any of the buttons above and get your car insurance before you buy your car.


Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.

All posts by Mark Mathon

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