How Long After Buying a Car Can You Be Without Insurance?
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Most states require auto insurance for all drivers, but when you first purchase a car, you might ask, "How long after buying a car can I be without insurance?" While most insurance providers offer a grace period to purchase coverage, you must legally have auto insurance to drive your new car.
What Is a Grace Period for Car Insurance?
Every state except New Hampshire requires drivers to have car insurance. Car insurance protects you, other drivers, and lienholders, which is why a dealership will ask for proof of a current auto insurance plan when you buy a new vehicle.
If you currently have car insurance, this policy may cover your new car for a limited time. This is called a grace period, a service most insurance providers offer. The grace period tells you how much time you have before you must purchase coverage for your new vehicle. There is a grace period with the purchase of new and used cars if you already have auto insurance, but there is no grace period if you don't.
Typical Grace Periods and Ownership Type
The grace period you have with a car purchase depends on whether it's a new or used car and whether or not you have insurance. Here are the differences:
New Car With Existing Insurance
If you have a current car insurance policy and want to buy or lease a new car, most insurers provide a new car insurance grace period of 7 to 30 days. However, you must purchase new car replacement insurance before the car insurance grace period lapses. Since the grace period can vary, you must ask your insurance provider about what your plan offers.
New Car Without Existing Insurance
You will not have a grace period when buying a new car without a current policy. Dealerships require proof of insurance before you leave the lot with your car, so you will have to purchase a policy before leaving.
Used Car With Existing Insurance
When buying a used car, your existing insurance policy will offer a grace period of 7 to 30 days, just like with a new car. You must contact your insurance company to determine the grace period length, as every insurance company sets its own rules.
Used Car Without Existing Insurance
Again, since you won't be covered already, you will need to purchase insurance before driving the car, as there is no grace period without an active policy. While a dealership will ask for proof of coverage before you leave, private sellers won't.
Factors Affecting Grace Periods
States regulate insurance through various laws, but each state's laws focus more on minimum coverage requirements than grace periods. The primary factor affecting grace periods is insurance provider policies. You should always contact your insurance provider when buying a new or used vehicle to ensure you have the necessary coverage for legal and financial purposes.
Consequences of Driving Without Insurance
A new car purchase is exciting, but you shouldn't drive without insurance, as this poses potential consequences, including:
- Loss of driving privileges
- Fines
- Financial implications
- Car impoundment
- Jail time
You can avoid these consequences by contacting an insurance provider for coverage. When doing so, they will ask for the car's information, including its make, model, and vehicle identification number (VIN number). Keep in mind that you'll also need car insurance to register your vehicle.
Proof of Insurance When Purchasing a Vehicle
Your insurance provider can give you a document showing proof of insurance, and you can also log into your insurance company's website or app to find this document. This document might be an insurance card, statement of coverage, or insurance binder, and you must show this to the dealer when buying a new car to prove you have coverage.
Types of Car Insurance Coverage
You can purchase different types of insurance coverage for each vehicle you buy or own. Older cars may only need liability coverage if they're not worth much and are paid off, but you must add additional coverage if you have a loan. Here are the types of coverage options you can choose for any car you own:
- Liability coverage: Liability financially protects you if you cause an accident that damages another person's car. Every driver should have liability coverage at a minimum.
- Collision coverage: Collision covers damages to your vehicle if you ever cause an accident that leaves you with damage. Every vehicle with a loan or lease requires this coverage.
- Comprehensive coverage: Comprehensive covers damages to your vehicle that collision doesn't cover, including hail damage and theft. All vehicles with loans or leases should have comprehensive coverage as well.
Furthermore, adding gap insurance is a good idea when purchasing a new car to protect the gap between your car's loan balance and its actual value. New car depreciation happens quickly; gap insurance is your only protection against it. It's also important to know that if you buy a new car and use the grace period on your existing policy for coverage, your new car will have the same coverage as your existing policy.
Recommendations for New Car Buyers
The best thing you can do is to purchase insurance for a new or used car right after before buying it, especially if you don't already have auto insurance. This process ensures you have sufficient coverage and protects your risks. After finding the right vehicle to purchase, contact EverQuote for car insurance. We provide comparison quotes, and the process is fast and simple!