Do I need proof of insurance when buying a used car? (2024)
You need proof of insurance when buying a used car. Though a private seller may not ask for it, you must get car insurance when buying a used car to legally drive your vehicle off the lot. Below, we'll overview how to get proof of valid insurance when buying a car that's used.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Sep 4, 2024
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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Do you need proof of insurance to buy a used car? Let’s dive into the answers in detail, so you understand everything you need to know before purchasing a used vehicle.
Looking to buy auto insurance for a used car? Keep reading to learn how to get proof of insurance before buying a car, whether used or new.
If you’re wondering how to get insurance on a used car, use our free quote tool above to instantly compare rates for used cars insurance from the top providers.
- Liability coverage is the minimum coverage amount drivers in almost every state must meet to drive a new or used vehicle off the lot
- You may have to purchase more insurance coverage if you finance a used car or your state has additional requirements
- A loss payable clause might also be required to get a loan to purchase your used vehicle
You Need Proof of Insurance When Buying a Used Car
Do you need proof of insurance to buy a car? While private sellers may not check your insurance, most dealers require insurance before finalizing a car sale since they register the car for you and it’s a legal requirement to drive. So, you usually can’t buy a used car without insurance.
Anyone looking to buy a car — new or used — has to purchase their state’s minimum auto insurance before registering the vehicle and getting license plates. Depending on whether you’re financing the purchase, you’ll also need other documentation, such as proof of income, identity, residence, and similar documents.
The first requirement is insurance. If you’re financing your vehicle, you’ll likely need full coverage — if not, you may only need liability or your state’s minimum coverage.
If you purchase your car from a dealer, be prepared to provide proof of insurance. You’ll also need to give them a copy of your driver’s license, financial documents, and a filled-out registration form, among other documents.
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Why Dealerships Require Full Coverage
A top question readers ask is, “Why does the dealership need proof of insurance?” When you take out a loan to buy your vehicle, the lender is the car’s legal owner until you pay off your loan. By requiring full coverage, the lender minimizes their financial risk if the vehicle gets damaged or lost with a remaining loan balance.
Full coverage is usually required when financing a car, whether new or used. To get an idea of what full coverage might cost you, we pulled the National Association of Insurance Commissioners (NAIC) average rates for various core coverages that you may be required to carry to purchase a vehicle:
Average Auto Insurance Rates by Coverage Type Across the Country
Auto Insurance Coverage Type | Average Annual Auto Insurance Rates | Average Monthly Auto Insurance Rates |
---|---|---|
Liability | $516.39 | $43.03 |
Collision | $299.73 | $24.98 |
Comprehensive | $222.86 | $18.57 |
Combined/Full | $954.99 | $79.58 |
If you owe money on the car, you’ll need comprehensive, collision, and possibly uninsured motorist coverage. Essentially, your lender wants to protect its interest in the vehicle if the car gets damaged or totaled while you still owe money on it.
How to Show Proof of Insurance When Buying a Car
How do dealerships verify insurance? Showing proof of insurance at a used car dealership is a simple process, and there are many ways to do it. You can show proof with a physical or digital copy of your car insurance card, which must include your policy number, effective date, and coverage details.
Read More: How to Get a Copy of Your Auto Insurance Card
So, why does the dealership need my insurance? Most states require some form of car insurance coverage to drive legally, so dealers want to ensure the vehicles they sell are insured before they exit the lot.
Do car dealers call your insurance? Yes, dealerships often call to personally verify policies are valid when selling a vehicle.
More About Getting Proof of Insurance to Buy a Car
Do I need proof of insurance to buy a car? Yes, and getting proof of insurance for buying a car, used or new, isn’t difficult. Once you buy the policy, you can go to your insurance company’s website, log in, find your insurance ID cards, and print them out.
You might also be able to use an app on your smartphone to access your ID cards. Print them out and bring them with you to the dealership or submit them online if the option is available. You’ll also usually receive cards in the mail.
Whichever method you use, ensure you have proof of coverage handy before buying a used car.
Ready to buy insurance for your used car? To make sure you have the coverage you need to purchase your used car, enter your ZIP code now to compare used car insurance rates in your area. Which auto insurance company is for you? Find out now.
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Frequently Asked Questions
Do I need insurance before I buy a used car?
You might be wondering, “Do I get car insurance before I buy a used car?” Yes, getting insurance when buying a used car is required, since most states mandate car insurance to drive.
Do car dealerships require proof of insurance?
Do car dealerships verify insurance? Yes, you’ll need insurance when buying a car from a dealer.
Why do car dealers need proof of insurance?
Some readers may wonder, “Why do dealerships check insurance?” Generally, dealers ask require proof of insurance for buying a car because it’s a legal requirement to drive in most states. In addition, lenders want to know that their financial interst in the car is secure.
Do dealerships call your insurance?
So, do dealerships call to verify insurance? Yes, sometimes dealers will call your insurer to directly verify your policy, particularly if financing your car.
Can I transfer my existing insurance policy to a used car I’m buying?
In most cases, you can transfer your existing insurance policy to the used car you’re buying. Contact your insurance provider to inform them about the new vehicle and provide the necessary details for the transfer.
What information do I need to provide to my insurance company when buying a used car?
When buying a used car, your insurance company will typically require information such as the vehicle’s make, model, year, identification number (VIN), and the purchase price. They may also ask about your driving history and any additional drivers who will be listed on the policy.
How soon do I need insurance after buying a used car?
It’s crucial to contact your insurance provider immediately after purchasing a used car. Some companies offer a grace period during which your existing coverage extends to the new vehicle, but this period is usually limited. To ensure continuous coverage, it’s best to set up a new policy as soon as possible.
Can I buy insurance for a used car before completing the purchase?
Yes, you can start shopping for insurance and even obtain quotes before completing the purchase of a used car. This allows you to be prepared and compare insurance options, making the process smoother once you finalize the purchase.
Can I buy insurance for a used car if I don’t own it outright?
Yes, you can buy insurance for a used car even if you don’t own it outright. If you have a loan or are leasing the vehicle, the lender or leasing company may require you to have specific coverage levels or additional coverage options, such as gap insurance.
Do I need a separate policy for my used car if I already have insurance?
If you already have insurance on a different car, you don’t need to add coverage for your used car before purchasing. Your existing coverage will apply to your used car for a brief period — check with your insurance company and state law to see how long you have.
Once you complete the purchase, you should contact your insurance provider immediately to set up a new policy for your vehicle. Your insurance rates may increase when you add your used car, depending on whether or not you are replacing another car.
Do dealerships verify insurance after purchase?
While most dealers don’t verify insurance regularly after a car purchase, if your car is financed, the lender may check for insurance coverage throughout the loan length.
How long do you have to get insurance after buying a used car in PA?
Do you have to have proof of insurance to buy a car in PA? Pennsylvania requires car insurance to legally drive, meaning you must get coverage prior to or at the time you buy the car.
Can I buy a used car without insurance?
No, you can’t buy a used car and drive it off the lot without car insurance. In addition, most dealers and lenders will ask for proof of insurance.
Interested in buying used car insurance? Enter your ZIP code into our quote tool below to compare rates from top providers near you.
Do you need insurance to buy a car from a dealership?
For those wondering, “How does insurance work when buying a used car from a dealership?” You always need proof of insurance to buy a car, whether new or used, since it’s a legal requirement to drive.
How long do you have to get insurance after buying a used car in Georgia?
You may be wondering when to buy insurance for a used car in Georgia. Georgia residents must secure car insurance before purchasing a used car.
How long do you have to get insurance after buying a used car in California?
CA drivers may wonder, “Do I have to have insurance to buy a car that’s used in California?” You must carry California’s minimum coverage requirements before buying a used car.
How long do you have to get insurance after buying a used car in Tennessee?
Do you need insurance before buying a car in TN? There is no grace period for getting insurance after a buying a used car in Tennessee. All drivers must carry the state’s liability requirements to register a newly purchased car.
How long do you have to get insurance after buying a used car in Ohio?
Do you need car insurance to buy a used car in Ohio? You must secure liability car insurance in Ohio before buying a used car to drive it off.
Do you need insurance to buy a used car from a private seller?
Some readers may wonder, “Do I need insurance to buy a car from a private seller?” You’ll need insurance to buy a used car from a private seller if you’re planning to drive the vehicle.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.