How Long After Purchasing a Car Should I Get Car Insurance?
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You’ve done the research, saved for your down payment and you’re finally ready to buy a new car. While the idea of driving around town in a new ride is exciting, thinking about your car insurance isn’t.
Whether your new car is brand new or a pre-owned vehicle, all drivers need insurance to drive their vehicle off the dealer’s lot legally. Driving without car insurance isn’t an option. Let’s go over a few key things to know when buying car insurance after purchasing a new vehicle.
What Should I Buy First – A New Car or New Car Insurance?
If you’re not sure whether to purchase your new car or car insurance first, you’re not alone. Many drivers are unclear about the process and what they need before buying their first car.
It’s always best to get an idea of how much your insurance will be before you buy your new vehicle. That’s because you don’t want to be stuck with a vehicle you love that costs far more to insure than you would have imagined. To start shopping, you’ll need some basic information about the vehicle you’re considering to compare insurance companies and choose a policy.
How Do I Get Car Insurance Before Buying a Car?
- Choose a car and get in touch with the dealership. Once you’ve found a vehicle you love, contact the dealership and let them know you’re interested in the specific make and model. They can give you the information you need to start your search for auto insurance.
- Get the correct information. To secure an accurate auto insurance quote, you’ll need to know the vehicle identification number (VIN), trim level, vehicle history, make and model, and current mileage.
- Compare insurance quotes. Use the information you received from the dealership to start shopping around and compare insurance policies and coverage options.
- Test drive the car. Once you’re sure the auto insurance fits in your budget, you can give the car a test drive and check it out to make sure it’s the vehicle you really want.
- Decide on a quote and purchase auto insurance. Now that you’ve found an insurance policy that meets your needs and budget and you’re sure you want to purchase the vehicle, you can move forward with securing insurance. When you make your initial payment, your insurance company will typically send you an electronic confirmation of insurance. You will take this to the dealership when you go buy your car.
What Kind of Car Insurance Do I Need for My New Car?
The level of coverage you select for your new car depends on the type of vehicle you choose and your needs. For example, if your car is leased or financed, you may be required by your lender to purchase full coverage insurance, including collision and comprehensive coverage.
On the other hand, if you buy an older car or pay in full, you can probably get away with state minimum insurance. Here’s a brief overview of the most common types of car insurance:
- Liability Insurance: This is the most basic form of insurance that covers other people’s injuries and property damage in an accident.
- Collision Insurance : If your vehicle is damaged in an accident, collision coverage pays for your damages.
- Comprehensive Coverage: This coverage pays to repair or replace a vehicle if stolen or damaged by fire or natural disasters.
- Uninsured and Underinsured Motorist Coverage: This insurance covers damage to your vehicle if you’re hit by a driver who is uninsured or who doesn’t have enough coverage to pay for your damages.
- Personal Injury Protection Insurance: If you’re out of work or have expenses from medical bills, this coverage helps you pay for some of these costs.
- Gap Insurance: This coverage is beneficial for financed vehicles in case your car is stolen or declared a total lost. It will cover the difference between how much your insurance company pays you and how much you owe on your loan.
- New Car Replacement: If you need help replacing your totaled vehicle, this additional coverage will kick in.
- Roadside Assistance: This coverage kicks in to help drivers with towing, lockouts, dead batteries, and flat tires.
Is There a Grace Period for Car Insurance When Buying a Car?
If you currently have auto insurance and you’re purchasing a new car, you will typically have a grace period where your current coverage protects your new car even if you haven’t registered the new vehicle.
This grace period will generally last 7-30 days depending on your provider. It’s important to note that only your current coverage will transfer over to your new vehicle during this grace period. That means if you only have liability coverage, but you purchase a newer vehicle that could benefit from additional coverage, you won’t have the protection you wish you did.
Also, keep in mind that you don’t want to let the grace period pass without ensuring your insurance is in order. Drivers with a lapse in their insurance history will generally find it more difficult to obtain affordable auto insurance in the future.
How Do I Know if My Insurance Policy Offers a Grace Period?
Contact your insurance agent or read your policy if you’re not sure if your insurance policy offers a grace period. Most car insurance companies offer a grace period anywhere from 7 to 30 days.
Which Insurance Carriers Offer a Grace Period for Insurance?
This isn’t a comprehensive list, but here are a few car Insurance companies that offer a grace period when buying a new car.
How to Get Proof of Insurance for Your New Vehicle
Drivers needing to obtain proof of insurance typically fall into two categories:
- You don’t have insurance and need to purchase an auto policy
- You need to add your car to an existing policy.
You don’t have insurance: Compare insurance rates from different companies to find the best plan that fits your budget and your coverage needs. Once you find a quote that works for you, secure insurance with the company so you’re protected.
You need to add your car to an existing policy: If you’re replacing the car that’s currently on your policy, you need to show your active insurance card to the dealership. Even if you’re adding a second car to your policy, it’s okay to simply show an existing card.
How to Update Your Insurance After Purchasing a New Vehicle
Since you have a grace period, you don’t need to rush to update your insurance after purchasing your new car. However, don’t want to wait too long.
To change your insurance for your new car, you’ll need to provide your insurance company with your new car’s VIN. If your insurer has an online portal, you can add the VIN yourself. If not, you can call and get an insurance agent to update it for you.
Finding Affordable Car Insurance for Your New Car
If you haven’t done your homework before going in to buy a new car, the sales people at the dealership may try to offer you an insurance policy through one of their partners. Unfortunately, while it may seem like a good deal, these policies are often overpriced.
To avoid overpaying for auto insurance, do your own research. Buying a new car is a great time to look at your insurance costs. It could be that your current insurance company isn’t offering you the best rates available.
If so, here are a few other ways to secure affordable car insurance for your new vehicle:
Examine Your Coverage Levels
The first thing anyone shopping for auto insurance should do is examine coverage levels. What kind of coverage do you currently have? Do you have full coverage auto insurance with collision and comprehensive coverage? Or do you simply have the state minimum coverage requirements with liability insurance?
Read the fine print of your new car contract to see which coverage you need to have. Many owners of leased and financed cars must have full coverage so the lender can protect their investment.
Even if you own your car outright, it’s sometimes a good idea to opt for more coverage than the state minimum requires. This way, your vehicle is protected after a covered incident.
Seek out Discounts
Look up what discounts your current insurer offers, or call your insurance agent to see which discounts you qualify for. The right discount could help you get more car insurance coverage for less! Here are some discounts to ask your insurance provider about:
- Paid-in-full discount: Pay for your 6 or 12 month premium up front and you can enjoy a discount on your rate.
- Multi-policy discount: Need to insure your home and car? How about your rental property and car? Your insurance company may offer a discount for having multiple insurance products under the same policy.
- Multi-vehicle discount: Save money on auto insurance for multiple cars with a multi-vehicle discount.
- Good driver discount: Drivers with a clean driving record can ask about the good driver discount.
- Good student discount: Are you a high school or college student with a B average or 3.0 GPA? You might qualify for a discount with your insurance company.
- Usage-based discount: You could pay less for your auto insurance with a usage-based discount if you spend less time on the road than the average driver.
Increase your Deductible
Your deductible is the money you need to pay out of pocket when filing a claim. Let’s say your deductible is $200. When you get into an accident and file a claim, you’ll need to pay $200 to your insurance company before they cover the rest.
While a low deductible may seem easier at first, it often results in higher monthly payments. On the other hand, a higher deductible will make your monthly payments cheaper, but you’ll be responsible for a hefty sum should you get into a car accident.
When deciding to increase your deductible, it’s best to consider if you can afford the increase with your current budget. If it could put you in a tough spot financially, it’s best to opt for a lower deductible which will keep your monthly payments more affordable.
Once you know what coverage you need and how much you can afford, you can start shopping around with different insurance companies!
You can compare quotes from 65+ insurance companies to see which is the best fit for you – and it only takes a few minutes. With our free auto insurance comparison tool, you can compare multiple insurance companies at once to find the best deal. Just enter your zip code below to get started on your search.
FAQs About Insurance When Buying a New Car
Can I drive a car without insurance if I just bought it?
No. It’s illegal to drive a vehicle without insurance, even if you just bought it. If you purchase a new or used car from a dealership, they’ll require you to show proof of insurance before driving away. Even if you purchase from a private dealer who doesn’t check your insurance, it’s still your responsibility to ensure you have it.
How many days do you have to insure a new car after purchase?
If you have an existing car insurance policy, you have a grace period of 7 to 30 days to update your insurance with your new vehicle. The specific amount of time depends on your insurance carrier. Otherwise, if you’re purchasing a new policy you need auto insurance immediately.
What insurance companies offer a grace period after buying a new car?
Many insurance companies will offer a grace period. Here are just a few – Progressive, Nationwide, Statefarm, Farmers, and Geico all offer insurance grace periods ranging from 10 to 30 days.
How can I find affordable insurance after buying a new car?
The best way to find affordable insurance coverage is by seeking out discounts, increasing your deductible, comparing prices with an online insurance comparison tool, and examining your coverage levels.
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