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Buying a new car is exciting. But before you head to the dealership, you might be asking: “Do you need proof of insurance to buy a car?”
The answer is yes, you do need proof of insurance to buy a car. You can purchase a new policy specifically for the vehicle before you pay for it, so you can drive it off the lot. Or, you can buy the policy later.
In this article, we’ll walk through the options. Then, we’ll recommend a couple of top providers that could be a good fit for insurance. Each of the insurers made our list of the best car insurance companies in the nation, so you can rest easy knowing your new car has great coverage.
When you’re ready to compare car insurance quotes, enter your zipcode below or give us a call at (844) 246-8209 for an easier process.
In this article:
Do You Need Proof Of Insurance To Buy A Car?
Yes. In most cases, even if you don’t have a specific vehicle in mind, you do need proof of insurance to buy a car. Take a look at your car insurance options before you start shopping for cars so your policy can start the same day you drive home from the dealership.
Whether your car is new or used, you’ll need to provide proof of insurance to the dealership before legally being able to drive it home. If you’re buying a car from a private seller, most won’t ask to see your car insurance details, but you will still need insurance on that car to legally drive it.
If you are trading in your car, you typically have 30 days to inform your auto insurance company of the changes to your policy. But we recommend telling your provider as soon as possible.
This is because the type of car you drive can affect your auto insurance rates. The more safety equipment that comes on your car – like anti-theft technology, anti-lock brakes, airbags, and passive restraints – can save you money on your car insurance. Plus, some cars are more expensive to insure than others.
No, you can’t drive without proof of insurance in most states. Almost every state requires motorists to carry some car insurance liability limits. New Hampshire only requires motorists to prove that they are financially responsible to pay for damages and injuries caused in an at-fault accident.
If you don’t buy insurance before you purchase your vehicle from a dealer, you probably won’t be driving off the lot that day.
Buying A New Car When You Already Have Insurance
If you already have an existing car insurance policy, you might be wondering if you need proof of insurance to buy a car on top of the coverage you already have. It depends. If you are buying a brand new car to add onto your existing policy, your policy might include a grace period that gives you temporary coverage for a week, sometimes more.
During that grace period, it’s expected that you tell your car insurance company about the new car so a representative can officially add it to your policy without you experiencing a lapse in coverage. In some cases, if you already have a car insurance policy, the liability limits you have on that policy will temporarily extend to the new car that you are driving.
Even if you’re buying a new car to take the place of an older one, you must tell your car insurance company about the switch during this grace period. You can’t just make the switch yourself, because then you will be driving around in an uninsured vehicle – which is illegal and can carry serious legal penalties.
Buying A New Car When You Don’t Have Auto Insurance
Buying car insurance before buying a car is the right idea if you want to take your car home the same day that you buy it, but sometimes it isn’t that simple.
If you don’t already have auto insurance, you’ll want to try and set up a policy before you head to the sale. This can be complicated because you need to tell the insurance company about the make, model, and year of the car, as well as the vehicle identification number (VIN).
While you’re doing this, you should call the car dealership or seller to confirm your intent to buy the car. Ask them to give you the necessary vehicle information for the car you want to buy prior to purchasing, so you can get insurance for that vehicle. In addition to the details mentioned above, you’ll want to ask for the current mileage on the odometer and the vehicle’s history report, if available.
Once you have all of that in order, it’s time to buy your car insurance policy so you can show proof of insurance. We’ve broken this process down into a few steps that will make buying auto insurance before buying a car easier:
- First, you should consider a variety of car insurance providers available in your area. We always recommend that drivers get quotes from multiple providers to compare coverage, rates, and other important factors. To do so, you’ll want to have information on hands such as your driver’s license number and social security number.
- Then, enter the vehicle information that you gathered from the dealership and decide on the level of coverage that you need. Comprehensive insurance policies offer more coverage, but rates for this kind of insurance will be higher than a policy that just meets the state’s basic car insurance requirements.
- Finally, you can set your car insurance policy to start on the day you plan to pick up your new vehicle and pay for your policy online.
How Soon After Purchasing A Car Do You Need Insurance?
Generally, you should consider buying car insurance before purchasing a new vehicle if you don't already have a policy. If you do have a policy and just want to add the new car to your insurance, you have usually had a 7-to-30-day grace period to tell your insurance company about the vehicle. This also goes for buying a used car.
If you decide to wait to purchase insurance after you buy your new ride, you will not be able to take possession of the vehicle and drive the car off the lot. In most states, it is illegal to drive without car insurance so remember to secure your policy to enjoy the new car the day you purchase it.
Our Insurance Recommendations When Buying A Car
When you’re shopping for car insurance, it’s smart to get quotes from multiple providers and compare coverage to be sure you’re paying the best rates. In our research, two car insurance companies that we’ve found to have affordable coverage and great customer service are Progressive and Geico.
When you’re ready to shop for car insurance so that you can ultimately show proof of insurance on your new car, we can help you get started. Follow the link below to get insurance quotes. Or call (844) 246-8209 for free, personalized quotes seven days a week.
We named Progressive car insurance the best option for high-risk drivers. Progressive keeps a competitive edge with technology like the Name Your Price® tool and an auto insurance comparison tool. Using the Name Your Price tool, you select the price you want to pay for car insurance first, then you are matched with Progressive policies that fit your budget.
Progressive has standard car insurance as well as roadside assistance, rental car reimbursement, custom parts and equipment value, and more.
We think that Geico auto insurance is the best choice overall. The insurer is the second largest in the nation for a reason. It received an A+ rating from the Better Business Bureau (BBB) and an A++ financial strength rating from AM Best, proving that it can payout on claims.
You can get extra types of coverage like mechanical breakdown insurance with Geico, and discount opportunities include a military discount, good student discount, and discounts for members of certain professional organizations and alumni associations.
If you’re having trouble choosing between these two providers, check out our review that compares Geico vs Progressive.
Methodology
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.
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Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Buying insurance for a car you don’t own is possible, but it’s challenging. Still, there are options for getting insurance for a car that’s not in your name.
If you are in one of these situations, you may want to buy car insurance without being the registered owner of the vehicle:
- You regularly use a family member’s car
- You frequently borrow a friend’s car
- You’re a caregiver for the owner of the car, who doesn’t drive much, or at all
- You bought a car from a private seller and you’re making payments and won’t get the title until it’s paid off
Depending on your circumstances, you might find one of the following options suitable for your needs.
Get Added to the Vehicle Owner’s Insurance Policy
If you live in the same household, it’s easier for the car owner to add you as a driver to their policy rather than you buying insurance for the vehicle (if you’re not already covered by the policy).
There may be no need for a separate auto insurance policy if you live outside the household and use a family or friend’s car only occasionally. Instead, have the owner check to see if you’re covered as a “permissive use” driver by their policy.
If you’re a caregiver and the person you help is an employer and not a family member, they’ll probably feel more comfortable having the insurance policy in their name. They should look into listing you as the primary driver. If they don’t have a valid driver’s license, they can be excluded from the policy as a driver and only listed as the car owner.
What if you regularly care for an elderly person who no longer drives? For instance, if you help someone who isn’t a household member and who owns the car but doesn’t drive the car. The owner can keep the insurance policy but be listed as an excluded driver and add you to the coverage.
Get Added to the Vehicle Title or Registration
Being on the title or registration (or both) gives you “insurable interest,” which means you prove to the insurance company that it’s in your best interest to prevent damage to the vehicle. With insurable interest, you can buy auto insurance without any hassle. If you’re a co-owner of a vehicle, see if you’re required to list the other owner on the policy as an additional insured.
If you’re using your parent’s vehicle but live away from home, consider being added to the title or registration so you can buy your own insurance for the car. Your parents can then save money by taking the car off their policy. If your parents gifted you the car, put it in your name and insure it as the owner.
If you buy a car from a private party with an installment plan, they may want to keep the vehicle titled in their name until it’s paid off. We’d warn against that. Instead, it’s better to transfer the title to you and list the seller as a lienholder on the title. You then can buy your own auto insurance policy.
List the Vehicle Owner as an Additional Interest on the Insurance
Additional interest means someone has a stake in the vehicle and is notified if you make changes to the policy. This is another option for getting auto insurance on a car you don’t own.
Insuring a car you don’t own and having the owner added in this way is permitted by some insurance companies since it keeps the vehicle owner involved. However, not all insurance companies allow this. To try this option, you’ll likely need to shop around.
Buy a Non-Owner Car Insurance Policy
Another option is buying a non-owner auto insurance policy. But keep in mind this will be secondary to car insurance coverage the vehicle owner has on the vehicle.
Non-owner coverage gives you liability insurance protection if you cause an accident and the vehicle’s owner’s insurance limits aren’t enough. Since no car is listed on a non-owner insurance policy, comprehensive and collision coverage aren’t available.
Non-owner auto insurance policies typically aren’t offered if you frequently use the car. Instead, you need to try another option, such as being added to the vehicle owner’s insurance policy.
With so many choices for car insurance companies, it can be hard to know where to start to find the right car insurance. We've evaluated insurers to find the best car insurance companies, so you don't have to.
Insurance for a Car You Don’t Own FAQ
Yes, you can insure a vehicle that you don’t own, but only if it’s allowed in your state and the car owner and insurance company are aware that you aren’t the owner.
Also keep in mind that It’s vital for the car insurance company to understand your situation and approve of it. If you don’t tell the insurance company you don’t own the vehicle, there can be consequences, such as a claim getting denied. Intentional misrepresentation of pertinent information is considered fraud.
It may be difficult to find a car insurance company that will sell you coverage for a car you don’t own. One potential concern is fraud—insurance companies may suspect the owner is a high-risk driver who is insuring the car in another person’s name to avoid paying high rates.
You may find it’s easier to have the vehicle owner buy insurance for the car and add you to the policy as a driver.
State laws regarding registration and insurance may dictate whether you can insure a car you don’t own. For example, New York car insurance laws say the name on the insurance card must match the name on the vehicle registration.
Check to see what your state laws require. If your name must be on the registration to insure a car, getting added onto the vehicle’s registration may be the best way to please the state and insurance companies to get the car insurance coverage you want.
Insurable interest for auto insurance is having a financial stake in the vehicle. That means you would experience financial hardship if the car is damaged.
To prevent excessive claims, car insurance companies want to know it’s in the best interest of the person insuring the vehicle to stay out of accidents. You pose more risk if the insurance company can’t see a clear motive for you keeping the car in good shape.
Showing that an accident would negatively impact you can boost your chances of buying insurance for a car you don’t own. For instance, disclosing that you use the car to commute to work and you’d be unable to work without the vehicle would show that you have insurable interest.