Can You Buy a Car Without Insurance?

Auto insurance can be expensive, and nearly every state requires it, but can you actually buy a car without insurance? While the right answer may seem fairly obvious (you’ll need insurance to actually drive your car off the lot), many people aren’t clear on the exact timeline. We’re here to answer all of your questions about buying a car without insurance, whether you’re buying a new car, buying a used car, or trading in a vehicle already on your policy.

Can You Buy a Car Without Insurance?

While you technically can buy a car without insurance, you won’t be able to drive it off the lot, as it’s illegal to drive without insurance in all states except New Hampshire and Virginia. The dealership will require proof of auto insurance, whether it’s a new or existing policy, for you to legally drive the car you just purchased. In sum, for you to get the car off the lot, liability insurance is your financial responsibility. Make sure you have a current driver’s license as well!

Existing Auto Insurance

If you have existing auto insurance, you’ll have a grace period where any other cars you add or trade in will be covered under your policy for up to 30 days. In that time, you have to change your policy so that any other cars are covered when this grace period ends.

If you’re trading in a car:

1. Call your insurance company to get insurance rate quotes for the car you want to trade in.
2. Ask for the deadline for notifying your agent of the final purchase.

If you’re adding a brand-new car to your policy:

1. Call your provider within seven to 30 days of buying your new car to verify your coverage.

When you call the insurance company, you’ll need the year, make, and model of the car as well as the vehicle identification number (VIN). The insurance company won’t need to see any paperwork but may want to physically inspect the car for damage, especially if it is used. The insurance carrier will then forward proof of insurance to you or to the dealership directly.

New vs. Used Cars

Whether you buy a used or a new car, you’ll need proof of insurance in order to drive it off the lot. That’s even true if you buy from a private seller in order to satisfy state auto insurance requirements.

What Should I Buy First, a Car or Insurance?

We recommend buying auto insurance before you buy a new car in order to drive it off the lot after you purchase it. However, many people aren’t sure exactly what car they will get, nor do they know its VIN. As you near the end of the buying process, call your insurance agent and have them run your new VIN so they can process the policy and get you the paperwork that day. Otherwise, you’ll have to wait until your policy’s effective date to start driving.

Is Dealer Insurance Worth It?

Anyone who’s ever purchased a car from a dealership has probably experienced getting multiple offers from salespeople. Many dealerships offer their own auto insurance, but is it worth it?

Don’t make a quick decision. Instead, do your research. Here are the basic pros and cons of dealer insurance.

Information Your Insurance Agent Will Need

You can’t get auto insurance without providing your agent some information about your car. Different cars cost different amounts to insure based on their prices and safety ratings. To get auto insurance, your agent will ask for your vehicle’s:

• Identification number (VIN)
• Make
• Model

They may also ask for other vehicle information, such as the vehicle’s mileage from the odometer. You’ll need to provide all of the requested information in order to buy the insurance and drive your car legally.²

Test-Driving a Car Without Insurance

If you test-drive a car, whether it’s from a dealership or a private seller, do you need to have your own auto insurance policy? Fortunately for car-shoppers, the answer is no. The insurance requirement falls on the dealership or the private seller, even for customers test-driving.

Auto Insurance Requirements by State

Of course, auto insurance requirements differ by state, so look up your state in our auto insurance guide to find out the minimum requirements.

Is Minimum Coverage Enough?

In some states, the minimum coverage is not sufficient for the potential costs of bodily injuries, property damage, medical bills, lost income expenses, and even lawsuits. Of course, there’s no universal answer to whether the minimum coverage is “enough;” it will depend on your circumstances. However, in most cases, we think people should get more than the minimum coverage required in their state.

Take Florida, for example. Florida is one of two states in the U.S. that doesn’t require any bodily injury coverage. On top of that, Florida’s minimum car insurance only requires $10,000 of property damage liability, nearly 85 percent lower than the national average of $18,400. Medical bills coverage and uninsured/underinsured motorist coverage aren’t required either.⁴

That means if you have the minimum coverage and get into an at-fault accident, you’ll have to pay out of pocket for the bodily injuries and medical payments of everyone involved in the accident, plus any property damages above $10,000 under a covered claim. While the lack of auto insurance requirements allows for cheap car insurance in Florida, it could end up costing you more in the long run. Learn about your state’s required coverage in our auto insurance guide.

Recap

Once you find out how much car insurance you need, make sure you’re insured before you buy your car. There’s no point in putting down cash for a car you can’t drive, so if you don’t already have a policy, we recommend getting one before you buy or lease your vehicle, even if you still have to get a car loan. Learn more about auto insurance in general in our auto insurance FAQs.