Statistics indicate that the average person is involved in a car accident once every 17.9 years. Fortunately, if you have car insurance when you get in an accident, you might have coverage for the costs.
Having car insurance at all times offers the protection you need when you get an accident, but you might be asking yourself, “do I need insurance before buying a car?”
If you are preparing to buy a car, you should find out the answer to this before you start shopping. Buying car insurance isn’t a time-consuming process, but it is an essential thing to do.
As you get ready to buy a new car, here is some information that will help you understand if you need car insurance before you buy a vehicle.
Your Current Policy Might Cover Your New Car Purchase
The first thing to consider when answering this question is, do you have auto insurance right now? If you already have a car, you probably have auto insurance. If you have a current policy, there is a good chance that it might cover your new car.
Many car insurance policies provide coverage for other vehicles, including times when you trade your car in. You might want to contact your auto insurance provider to ask if your policy offers drive other car coverage.
If your policy includes this coverage, it means that you can drive your new car home from the dealership with coverage. Your current policy will provide coverage to your new car, but the coverage might have limits and time frames.
An important thing to know about this is that if your current policy covers your new car, it will only provide equal coverage. For example, if your existing plan is for liability-only coverage, it will only provide liability coverage for your new car.
If you need more than liability-only coverage for your new car, you probably should not drive the new vehicle until you update your policy. If your existing policy includes collision and comprehensive coverage, you might be fine.
While there is a good chance that you will not encounter an accident on your way home from the dealer, what would happen if you did? You could risk a lot by doing this, so it might be a good idea to contact your agent before leaving the dealership.
Having a Loan Makes a Difference
So, do you need car insurance before leaving the dealership? You might need it, and one factor that affects the answer is your loan. Are you getting a loan on your new vehicle? If not, you will not have a lender telling you that you must have insurance.
If you have a loan, it means that you have a lender, and your lender can require things. One of the most common things that lenders require is full-coverage insurance plans.
When you borrow money through a car loan, the lender requires specific insurance types for protection. Your insurance protects the lender. If you wreck the car, your plan covers the damages and pays off the loan.
Therefore, if you plan on buying a car with an auto loan, you should probably contact your insurance agent before leaving the car lot. When you call, they can start a policy for you over the phone for your new vehicle.
Where You Buy the Car Also Matters
While there are situations where you do not need car insurance when buying a new car, there are also situations when you will need it. Another factor that affects the answer to do I need insurance before buying a used car is where you buy the car.
If you buy a car from a private seller, the seller will not insist that you have car insurance before leaving their home. Therefore, you will not need car insurance when buying a car from a private seller.
On the other hand, when you buy a car from a dealer, they might require it. Some dealers might only require car insurance on brand-new vehicles or vehicles with loans. Other dealers might require it for all car purchases.
When a dealer sells you a car, they take a risk when you leave the lot without insurance. If you total the car on the way home, you might decide to void the deal with them.
While you might have to fight to get your money back, the dealer can avoid this problem entirely by requiring auto insurance before you leave. Having this requirement is one way that dealers avoid lawsuits after selling vehicles.
How to Get Insurance Before Buying a Car
While you might not need to buy car insurance before purchasing a car, it is usually better to buy a policy. Having car insurance all the time protects you against lawsuits, damages, and expenses.
If you want to buy a policy before buying a car, you can do this by contacting an auto insurance agent. If you already have auto coverage, contact your agent. When you talk to them, tell them that you plan on trading in your vehicle.
Your agent might suggest contacting them once you choose the car you want to buy. When you choose the car, you can call your agent once again to give them the details.
Your agent will need the year, make, model, and VIN from the vehicle. From there, the agent will calculate your quote and start your policy once you pay the bill. You can pay the bill right over the phone if necessary.
“Do I Need Insurance Before Buying a Car?” Learn More Before You Shop
Buying a new or used car is exciting, and having insurance coverage is an important part of owning a vehicle. After reading this article, hopefully you know the answer to this question, “do I need insurance before buying a car?”
If you enjoyed this article, you might want to check out the rest of our blog for more articles about insurance and buying a car.