Do Car Dealerships Give You Insurance?
You’ll need car insurance before driving a new or used car off the lot, but not all dealerships will offer it. Check out the details here!
Written by Andrea Barrett
Reviewed by Amy Bobinger
All car dealerships will require you to have insurance before you can drive a new or used car off the lot, but not all of them will offer it—you may have to come prepared with a policy!
Car shopping is a really exciting process. You’ve picked your ride, agreed on the buying price, and are impatiently waiting to drive your new set of wheels off the lot—but before you hit the road, there are a few requirements you’ll need to fulfill. Aside from financing details, finding insurance is one of the most important things you’ll need. And if you’re financing your car, you’ll be required to purchase
full-coverage car insurance
before you leave the dealership. So, can your dealer set you up with an insurance policy? If you’re
buying a new car
and need car insurance, too, we’re here to walk you through the details of whether car dealerships can offer temporary car insurance
for purchasing a new car. Can you buy a car insurance policy from a dealership?
Maybe—most car dealerships will allow you to purchase temporary insurance, but you won’t have access to a complete roster of insurance providers.
Although laws differ between states, most states require
proof of car insurance
before you can drive your new car off the dealership lot. If you have an existing car insurance policy for another vehicle, your insurance provider will generally cover a new car automatically for up to four days after the date of purchase. If your provider doesn’t cover a new car and you haven’t set up an auto insurance policy, you may be able to purchase temporary car insurance from your dealership.But before you complete the purchase of your new car, ask your dealership about insurance options. Not all dealers will offer car insurance, so you’ll want to be prepared if they don’t. You may need to find temporary car insurance on your own and have your details handy to complete the sale.
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What kind of insurance coverage do car dealerships offer?
If you’re looking to purchase car insurance through your dealer, what they offer will depend on the dealer. Most dealerships offer temporary car insurance, but some dealers may work with insurance brokers to help you find an annual policy.
When looking for a policy, the minimum requirements for new car insurance will vary depending on whether you lease, finance, or pay for the car in full.
- Leased car: Most dealerships requirecomprehensiveandcollision coverage, and yourdeductiblemight be capped at $1,000. Depending on where you live, your state’s liability coverage limits may not be enough, as most leading companies want coverage of $100,000 per person, $300,000 per accident for bodily injury, and $50,000 for property damage.
- Financed car: In addition to your state’s minimumliability car insurancerequirements, financed cars generally require comprehensive and collision coverage.
- Owned car: If you’ve paid for a car in full, you’ll only need to meet your state’s minimum liability insurance requirements.
Do you need proof of insurance to buy a new car?
Yes—Dealerships will require proof of insurance before allowing you to drive off the lot for any new and used, leased, or financed vehicle. You will also need to ensure the policy meets the
minimum car insurance requirements in your state
. The minimum requirements generally include liability coverage—bodily injury liability and property damage liability—and additional coverages are up to the driver. A private seller may not require you to provide proof of auto insurance coverage before purchase, but you will need to have insurance before you can legally drive your new car.
When do you need to update your insurance policy for a new or used car?
How soon you should update your car insurance policy when buying a new or used vehicle depends on your car insurance company.
When you’re considering buying a new or used car, you should also be thinking about your car insurance needs. Although you don’t always have to have a new policy lined up before your purchase, it is recommended. But if you have an existing insurance policy for another car, you may not have to purchase a new policy.
Most insurance companies will offer a grace period for buying a new vehicle, whereby your new car is covered. This period ranges from seven to 30 days for most providers, but it varies. Read through your policy details to determine if you have a grace period.
It’s also important to remember that if you do have a grace period, the coverage only includes the coverage you had on your previous vehicle (or your current one).
But depending on the dealership and your purchase terms (leased or financed), you may have to provide proof of insurance before you can drive off the lot.
Driving without car insurance
is illegal in every state, and if you’re caught, it can lead to some hefty consequences. If you have an existing policy and plan to stay with the same provider, you’ll need to notify them of your new car purchase, and they will likely need the following information about your new vehicle:
- Vehicle identification number (VIN)
- Purchase price
If you’re purchasing a policy from a new provider, you’ll likely also have to provide the following:
- Your name
- Your address
- Your driving record
MORE: Why you should shop for car insurance every six months
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Do car loans include insurance?
No—car loans do not include car insurance, but proof of proper insurance is required before leaving the auto dealer with your brand-new vehicle. Although not always, most lenders will require you to carry full-coverage insurance for the entirety of your loan term. This protects their investment if you’re involved in an accident and the vehicle is totaled, and you can no longer afford to make the monthly payments.
Full-coverage insurance will include liability insurance, collision, and comprehensive coverage, but it also may include add-ons like
gap insurance
or uninsured/underinsured motorist coverage
.Can you drive your new car home without an insurance policy?
Driving a car without insurance, regardless of whether it’s new or used, is illegal in most states—and it can have severe consequences if you’re caught by authorities. In most cases, dealerships will require you to provide proof of insurance before you can legally operate a motor vehicle and drive it off the lot, but the types of coverage depend on the terms of purchase.
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