Do You Need Insurance to Test Drive a Car at the Dealership?

You are usually covered by the dealership's insurance when test driving a car, but this is not always the case. If you're in doubt, consider buying non-owner auto insurance or temporary auto insurance. Learn about your best options.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Written by Mathew B. Sims
Editor-in-Chief Mathew B. Sims

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Jun 2, 2022

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Things to Remember...

  • Typically, dealerships usually insure their entire inventory to safeguard their investments from any eventualities
  • You will likely be covered under the dealership’s fleet and liability insurance when test driving their vehicles
  • You need a valid license to test drive a car and may need to sign a waiver, so read the fine print to ensure you are covered

Yes, you can usually test drive a car without insurance. But you must make sure that you have insurance under the dealership’s coverage. Otherwise, you are better off getting separate insurance to cover you while you test drive the vehicles you are checking out before buying.

Test driving a vehicle gives you an accurate picture of how you will feel inside it. For example, it’s one thing to think that a car is big enough based on its specs, and quite another to sit in it and push the seat backwards to make sure it accommodates you frame. Also, you get to determine what issues, if any, there are when driving a vehicle. 

However, you should not test drive the car if you have no insurance coverage because you may end up in legal trouble.

Be sure to acquire and verify auto insurance coverage for yourself and the dealership before test driving a car. Enter your ZIP code above to find the best auto insurance rates today!

Do you need specific insurance to test drive cars?

You are better off getting additional insurance for test drives, especially when in doubt about the dealer’s insurance.

For example, you could get non-owner auto insurance. The insurance protects you from liability if you cause an accident while driving someone else’s car, such as a rental or borrowed vehicle. And technically, a dealership car you test drive is a borrowed vehicle.

Also, if you need insurance for a test drive and to drive a car home, you could purchase temporary insurance coverage. The insurance may last anywhere from one hour to six months, and is a very convenient way of getting insured while test driving a vehicle and driving it home. Buying this type of insurance enables you to have some grace period to think about the most appropriate auto insurance for the long term.

In addition, you can shop around for the cheapest car insurance that will cover you and the vehicle you end up driving off the dealership lot. If you are involved in an accident while test driving and you are at fault, that insurance may save you hundreds of thousands of dollars.

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Do dealers have insurance?

Dealerships must have insurance to safeguard their businesses and vehicles against most eventualities, such as damage from accidents, vandalism, and theft, among other things. Their insurance may be in the form of liability insurance and fleet insurance. In addition, they have workers’ compensation insurance that protects their workers.

Most car dealers will allow you to buy a car even without insurance. However, you will likely not drive home with your new purchase without that auto insurance until you get at least the basic coverage mandated by your state laws.

It is worth noting though that dealerships have insurance that is meant to protect their business. That means it will cater to their inventory and liability expenses associated with their clients and salespeople. But it will do so to the extent that it takes care of their financial interests.

If you test drive a vehicle and get into an accident, the situation may get tricky, depending on your role. Should the cost of damages exceed what the dealership insured themselves for, you may have to pay off the difference. So, it helps to ask yourself, “Does my insurance cover test drives?”

You Need Insurance Coverage to Test Drive a Car

In short, on a test drive, insurance is usually provided by the dealership, but you should make sure this is the case before getting on the road.

Apart from New Hampshire (NH), all other states mandate liability insurance before you can drive on their roads. So, always ensure you are insured whenever you drive, even in NH. Generally, dealerships will cover you through their auto insurance. But there may be some conditions you need to fulfill to enjoy their full coverage.

For example, the insurance may only cover you if you test drive a vehicle with a dealer’s salesperson. So, read the fine print and ensure that the dealer or your insurer covers you before driving off the lot to get a feel for the vehicle you’re considering. Should you be involved in an accident, you won’t deal with the financial consequences.

If you need to quickly purchase an auto insurance policy to test-drive a car at a dealership, get free quotes by entering your ZIP code to compare auto insurance coverage from top companies in your area.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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