Buyers considering the purchase of a car may well ask themselves, “Do I need to have auto insurance before buying a car?” The answer is a qualified “Yes.” While you don’t have to have auto insurance just to buy a car, you do have to have it before you can drive it off the dealer’s lot or away from the owner’s location.
Here are some tips on how to handle the issue of auto insurance and buying a car.
- Call your insurer ahead of time. If you know the car you’re going to buy, for example, you’ve placed an order for a specific make and model or are arranging to buy it from dealer stock – and you already have the vehicle identification number (VIN), call your auto insurance company or agent ahead of time and give him or her the specifics. You can also inquire about coverage costs for general vehicle types, if you’re considering an SUV versus a large family sedan or a compact coupe versus a crossover. That way, you’ll be able to get a good idea of what you’ll be likely to pay for one vehicle type compared with another.
- Call at the dealership. Another way to handle getting your auto insured before you drive away from the dealer’s lot with it is to place a call while you’re at the dealership doing the purchase or lease transaction. This is fairly typical and you’ll get the policy put into effect right away if you’re just replacing one vehicle with another or plan to add a new vehicle to an existing auto insurance policy with the same company. Since you need auto insurance before you can leave the lot, the dealer will be asking you for your agent’s name and/or auto insurance company to put on the paperwork. What happens is this: the insurance agent will ask a number of questions over the phone, including the VIN, and will issue a binder immediately. This will serve as insurance on your vehicle until the agent can add the new car to your existing policy. In any case, you’ll be covered – and can legally drive off the lot.
- If you don’t have an insurance agent or don’t have an auto policy, act ahead of time. Maybe this is your first car and you don’t already have an auto insurance policy. While the dealer may be able to refer you to an auto insurance company, you won’t be able to get your new (or used) vehicle insured on the spot. A first-time policy requires some advance notice and preliminary paperwork. Plan to allow at least a week to get your auto insurance coverage in order before you attempt to buy a car and take it home.
- Never drive without auto insurance. It is against the law in all 50 states and the District of Columbia to drive a vehicle without auto insurance. It’s never okay to think you can leave this detail until later. Better to buy the car and leave it at the dealer until you can get it insured than to take any chances – again, even if the dealer will allow you to drive it off the lot, which isn’t likely.