Do you need insurance to buy a used car?

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Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2017

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Here's what you need to know...
  • You can purchase a used car without insurance
  • You cannot drive a car without insurance
  • Most DMVs will not let you title and register a car without insurance
  • To find an affordable insurance policy, use a comparison quote tool

In order to operate a car legally, you must have insurance before you drive the car.

This means that you can purchase the used car without insurance, but you must have car insurance before you put it on the road under its own power.

To locate an affordable policy for your newly purchased used car, try using an online car insurance comparison tool. Start comparing car insurance rates now by using our FREE tool above!

Purchasing a Used Car

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How you pay for your used car will determine how much insurance you need. Used cars can be purchased via a car loan or with cash.

If you opt to purchase your used car with a loan, your financing company may require full coverage or collision and comprehensive insurance.

If you purchase your car in cash, you are only obligated to purchase the minimum amount of insurance required by your state’s insurance laws.

However, the minimum required insurance may not meet all of your needs.

Therefore, it is important to research several policies via a comparison tool and read the fine print before deciding to purchase an auto insurance policy.

State Minimum

State minimum insurance policies are the least amount of insurance you must purchase in order to legally drive.

These policies do not cover you if you are the at-fault driver, and they may not fully cover the cost of a car accident.

In Ohio, the state requires that you purchase bodily injury and property damage liability coverage.

  • Cheapest type of car insurance policy
  • Cheapest type of car insurance policy
  • May leave you underinsured

Liability Insurance


Liability insurance covers the other driver if you are in an accident and the accident is your fault. It does not repair or replace your vehicle or pay for any of your potential medical expenses.

New York requires all drivers to have liability insurance. Letting your car insurance expire or refusing to carry at least minimum liability insurance in New York can result in the suspension of your car’s registration and license plate.

If you get into a car accident in the state of New York and do not have car insurance, you could have your driver’s license revoked and be forced to pay fines up to $1,500.

  • May not provide enough coverage
  • More expensive than state minimum
  • You are responsible for fixing or replacing your car if you are the at-fault driver

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Collision and Comprehensive

Collision and comprehensive car insurance policies cover your medical bills and the repair and replacement of your car if you are involved in an accident and the accident was deemed to be your fault.

They also protect you against under-insured drivers, whose policies may not offer amounts high enough to cover the costs of the accident.

  • Most expensive type of car insurance policy
  • Protects you regardless of who was at-fault
  • May be required if you have a car loan

Making your car insurance affordable

In order to lower the cost of your monthly premium, you may want to raise your deductible and check to see if you are eligible for any discounts. Your deductible is the amount that you pay before your insurance pays for the repair or replacement of your car.

Having a higher deductible often results in a lower monthly premium, however, your deductible should not be an amount that you can never afford.

Car insurance companies typically give discounts for safe drivers, cars that have certain safety features and drivers that have more than one policy with the same insurance company.

Additional discounts may include good student discounts and safe driving senior citizens that enroll and participate in a safe driving course.

To find the most affordable insurance your budget and your driving habits, consider using a comparison tool to quickly pull up multiple policies.

Purchasing Car Insurance for Your Used Car


Once you know which car you will purchase and have notified the private owner or dealership of your intentions, you can purchase car insurance.

When you use a comparison tool or call the insurance agency, you will be asked several questions, including the make, model and year of the car.

You will also be asked if the car has any safety features, like airbags and ABS brakes, and if you plan to use the car primarily for business or personal use. This will help the insurance company determine your monthly premium.

While you can purchase a used car without car insurance, you cannot legally drive the vehicle until it is insured. You will also need proof of your car insurance in order to title and register the vehicle.

Start comparing car insurance rates now by entering your zip code in our FREE tool below!

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