Do Car Dealerships Check Your Insurance?
You can’t drive a car off the lot without the proper insurance, so car dealerships will verify proof of insurance before you buy.
Written by R.E. Fulton
Reviewed by Kathleen Flear
Table of Contents
- Do I need auto insurance to buy a used car?
- Do car dealers verify insurance?
- Do I need more than liability insurance?
- How to get insurance on a new car if you don’t already have a policy
- How to buy affordable same-day insurance
- What is temporary auto insurance?
- Can I drive a car I just bought without buying insurance?
- So, will the dealership check my insurance before selling me a car?
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Yes, car dealerships verify your insurance. For new and used, leased or financed vehicles, you will need to provide proof of insurance to the dealership. The policy will also need to meet the minimum insurance requirements in your state.
Dealerships check your insurance because it’s illegal to drive without it—even if you’re just bringing your
new car
home from the lot. If you already have insurance on another car, you might be able to use your existing policy for a temporary grace period (usually around 30 days) to drive off the lot but this will not be an option if the vehicle is leased, financed, or a state where the dealership will register the car for you.In this guide, we’ll show you how to find affordable
car insurance
coverage before you head to the dealership so you can buy your car worry-free. Compare insurance quotes from 50+ carriers with Jerry in under 45 seconds (Title in payload)
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversDo I need auto insurance to buy a used car?
Yes. Each state has a
minimum coverage level
that your auto insurance policy must meet before you can legally drive any vehicle, whether it’s new or used. Every state (except New Hampshire
and Virginia
) requires drivers to purchase liability coverage
, and dealerships won’t sell a car to a driver without the necessary coverage. Leased and financed vehicles have additional coverage requirements. If you’re taking out an auto loan to buy your new car, most lenders will also require you to carry
collision insurance
and comprehensive coverage
.Key Takeaway Even if the seller or dealership doesn’t verify your auto insurance, you still need to have it.
Do car dealers verify insurance?
If you buy from a dealer, they are responsible for processing the paperwork for the Department of Motor Vehicles. So you must provide
proof of insurance
to the dealership before you can receive the keys to your new ride.Some dealers will ask to see the actual documentation. Others will simply ask you to sign a legally binding document declaring that you have the required coverage. Either way, you can expect the dealership to verify your insurance before you can drive off the lot.
Do I need more than liability insurance?
Possibly. In many states, you only need
property damage liability
and bodily injury liability
coverage. However, some states also require personal injury protection (PIP)
, medical payments
coverage (MedPay), and/or uninsured/underinsured motorist coverage
. You’ll definitely need more than liability insurance if you are financing a vehicle. This is usually included in your contract, so you’ll need to be able to show that your policy includes collision and comprehensive coverage. Dealers often use the shorthand
“full coverage”
to refer to a policy that includes both comprehensive and collision. On top of full coverage, you can purchase a product called “gap insurance
” that will cover the difference between your insurance payout and your remaining loan balance if your vehicle is totaled shortly after purchase. So how much insurance do you need? It depends. Sticking to the minimum requirements set by state law or your lender will keep your car insurance rate lower, but additional coverage might be worth it, especially if:
- You live in an area where heavy traffic or bad weather makes accidents common
- You’re buying a rare or luxury vehicle
- You have a teenage driver in your household
- You can afford to purchase additional coverage or raise your liability limits
MORE: How to buy a used car from a dealership
“Jerrywas fast and easy to use. Their customer service was so helpful in helping me navigate the situation my state is dealing with. Now I’m saving an extra $100 every 6 months!” —Tony C.
Why do financed cars require full coverage?
If you finance a vehicle, the lender is still technically the legal owner until you pay off the loan. As long as you’re making monthly payments on the loan, the lender gets to choose the level of coverage you need.
You should plan to maintain full coverage until you’ve paid off the loan completely. This will protect the legal owner if the vehicle is damaged while you are behind the wheel.
How to get insurance on a new car if you don’t already have a policy
It’s easy to go online and buy a car insurance policy—but it’s also easy to overpay for car insurance if you’ve never bought it before.
Here’s the secret: every auto insurance company uses a different set of calculations to set your premium, so you could get five different insurance quotes for the same coverage from five different companies. For example, if
State Farm
quotes you a high rate because of those points on your driver’s license from a traffic ticket two years ago, Allstate
or Progressive
might weigh those violations differently and give you a lower rate because of your high credit score. Everything from your credit history and driving record to your age, gender, ZIP code, and type of car can affect your auto insurance rates, and they’ll look a little different with each provider. That’s why buying the first policy an insurance agent offers you is one of the biggest mistakes new drivers make when looking for cheap car insurance.
Instead of going with the first quote you find, compare quotes from at least three to five different car insurance companies. You can compare accurate quotes as soon as you know what make and model of car you want to buy, and you’ll be able to buy your new policy once you have the vehicle identification number (VIN) for the exact vehicle you plan to purchase.
How to buy affordable same-day insurance
The earlier in the car-buying process you start comparing rates, the better your chance of finding a cheap rate.
But we get it—life happens, you’re busy, and buying insurance is probably the least exciting part of any car purchase. Good news: even if you’ve left it to the last minute, you can get affordable
same-day car insurance
and drive away from the dealership insured. Most car insurance companies will activate your policy the same day you buy it. And you don’t have to skip the comparison step, either! Comparing car insurance quotes doesn’t take long, especially if you’re using
a trustworthy online broker or comparison tool
. MORE: 8 easy tips for saving money on car insurance
What is temporary auto insurance?
Temporary car insurance
is not commonly available in the United States except in unusual circumstances.Most insurance providers will only write policies between six months and one year. Instead, temporary auto insurance usually refers to a product like
rental car insurance
, where drivers may be offered a short-term policy through the rental company. If you’re buying a car, you’ll need to buy at least a six-month policy. MORE: Is pay-as-you-go insurance right for you?
Can I drive a car I just bought without buying insurance?
No—but there’s a bit of a loophole for drivers that already have coverage. There is something called an insurance grace period, and it could last between 14 and 30 days.
If you already have existing insurance, there may be a clause in your policy relating to newly acquired vehicles. This coverage could extend to cover your new vehicle for a limited time until you can officially
add the vehicle to your policy
.Call up your insurance company agent to confirm how long you have to add the new vehicle. If you are replacing the vehicle on your policy with a new one, your coverage could even extend to the final date of the current term. But keep in mind, when using this grace period, your vehicle isn’t “officially” on an insurance policy, so you can still be cited for
driving without insurance
.Buying from a private seller
means that you probably won’t have to show them proof of insurance. However, you still need to have car insurance if you will be driving.So, will the dealership check my insurance before selling me a car?
The bottom line? Yes. You need to be covered before you drive off the lot with a new or used vehicle, and the dealership is obligated to verify your insurance.
However, it’s important to allow yourself to research insurance and compare quotes. A casual search online will not bring up the best rates.
“Jerrywas easy to use with great savings. I was afraid to get car insurance because of my age and new car. But with this app, I found my own affordable policy. I definitely recommend it for young drivers.” —Xena S.
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How long do I have to get insurance after buying a used car?
You need coverage before you get behind the wheel. If you don’t already have insurance coverage, you’ll need to buy at least minimum liability coverage before you head to the dealership. If you already have insurance, let your insurance company know about your new vehicle as soon as you can. It may even be possible to transfer your old vehicle’s policy to your new one.
How do I get auto insurance before I buy a car?
If you know which vehicle you will purchase, you can buy a policy ahead of time! You will need to provide information about the make, model, mileage, and VIN for your exact car. Otherwise, you’ll have to wait until you know which vehicle you’ll be taking home.
Knowing what you can expect to pay for insurance might help you narrow down your choices—so you only test-drive vehicles you can actually afford to maintain insurance on.
