How can I test drive a car without insurance?

While it is possible to test-drive vehicles as a prospective buyer without worrying about liabilities, there are still moments where prospective buyers will not have liability coverage or physical damage coverage for the car in question. A small hesitation when braking, overlooking a stop sign or failing to account for a blind spot could land you in civil court if you do not know when you need personal auto insurance and when you do not.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: Mar 23, 2022

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Here's what you need to know...

  • In many cases, you can test drive a vehicle without having your own insurance policy
  • When test-driving a car at a dealership, typically the dealer’s insurance will be sufficient for anyone driving the vehicle
  • When test-driving a car owned by a private party, there are several questions you should ask to ensure you’ll have adequate coverage while driving

There are not many scenarios where you can legally drive without insurance, but one scenario where you are commonly covered without insurance is when you are on a test drive.

While it is possible to test-drive vehicles as a prospective buyer without worrying about liabilities, there are still moments where prospective buyers will not have liability coverage or physical damage coverage for the car in question.

A small hesitation when braking, overlooking a stop sign or failing to account for a blind spot could land you in civil court if you do not know when you need personal auto insurance and when you do not.

Does my insurance cover a test drive?

New drivers are taught that driving without insurance is against the law, and to an extent this is true. What these new drivers do not know is that they are not always responsible for the insurance that is on the vehicle.

It is the owner’s responsibility to purchase auto insurance on vehicles that they own. You must have an insurable interest in complying with mandatory laws and insuring a specific car.

Buying from a Dealership

When buying a car from a dealer, the party with an interest in the vehicle is the dealer. Since the car is not registered and titled like a personal automobile, it requires special garage liability insurance that is written specifically for a commercial new or used car dealership.

The coverage that is purchased by the dealer will provide protection when a lot vehicles are damaged or when a third party suffers damage or injuries while a lot vehicle is being driven.

Both employees and customers who are test-driving cars on the lot are covered for liability and for physical damage claims.

Buying from a Private Seller

When you buy a car from a private seller, you still do not have an interest in the car. With that being said, a private party will only carry standard personal auto insurance on the car.

This is why it is essential that you check with the owner to verify that they are insured and that they have sufficient limits of liability.

There are legalities, and you have protections, but no one wants to end up in a long legal battle because they simply did not ask a straightforward question.

Even if you do experience a loss, the owner of the vehicle will be the one responsible to pay for the damages that are sustained at the hands of a driver in their vehicle.

Verifying there is third-party liability and physical damage coverage will just help eliminate some of the issues that can arise if you do suffer an accident on your short test drive.

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Test Driving a Car at a Dealer

After browsing the lot at a dealership and finding a car that strikes your eye, it is finally time to ask for the keys so that you can test how the vehicle handles and if it has any power.

The dealer will ask for you to provide your driver’s license, which will be verified before you can drive any lot vehicles.

What many buyers do not know is that the sales agent starts qualifying you as soon as that license is handed over.

You may not need to have insurance but in order for the dealer’s insurance to cover you, having a valid driving license is required.

This is why you are asked for your license and not for any type of proof of insurance.

Personal insurance is not necessary until you buy a car and finance it. When you sit in the finance department and discuss interest rates, you will need to provide a copy of your insurance cards before the agent lets you leave the lot.

Since you now have an insurable interest in the car, you can buy coverage for that car to protect your assets and to protect the bank’s asset.

Test Driving a Private Car

The process of test-driving a car is a bit less formal with a private seller. If the seller trusts you, they may not even ask to see your driver’s license.

Just because a seller looks responsible and trustworthy does not mean that you should take them at face value.

You need to ask the right questions just so that you know that you are driving a vehicle that has coverage even though you do not have insurance of your own.

There is nothing worse than having an accident in a vehicle that you do not own when the seller decides to take the risk by canceling the cover.

Here are some questions you should have the answers to:

  • Does the owner have liability insurance? You do not want to unknowingly drive an uninsured vehicle. Ask the seller if the car has coverage and let them know you do not have your own. All the leading insurers will offer cover for permissive users who are licensed to drive in the United States, but this should still be verified.
  • Does the owner have collision? Collision pays to either repair a vehicle or replace it when it is totaled. You should verify the car has collision cover and that you are not responsible for paying the deductible if you have an unintentional accident. If you can come to an agreement before anything happens, you will be at ease if anything does.

It is natural to wonder why it is okay to test drive a car without coverage, but now that you know that reason, you can start to window-shop.

If you have a specific car in your sight, get quotes for insurance coverage so that you can price monthly expenses.

How long should a test-drive last?

When test-driving a car, we’d recommend going as long a drive as possible. This allows you to practice driving the car so you become familiar with its controls and feel more comfortable behind the wheel. You should also drive it on different types road, to see how well it performs in a city center versus country roads, motorway etc.

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The Bottom Line

If you don’t already have your own auto insurance policy, that shouldn’t prevent you from taking a test drive in a car you’re interested in purchasing from a dealership. All dealerships must insure the inventory they sell. Typically, this involves a blanket policy covering accidents and any damage to the car that occurs during test drives, which is then paid for by the manufacturer. Commercial liability insurance is designed for commercial sellers, including auto dealerships. It covers both customers and dealers‘ employees.

If you do have car insurance, however, you can enjoy an added piece of mind during your test ride. If there’s an incident, and the dealer attempts to hold you responsible for damages to their vehicle, your car insurance policy can help protect against them attempting to recoup the repair cost from you or your insurer (if you’re insured).

You can start comparing car insurance rates now by using our FREE tool below before you shop, so you will not be startled with sticker shock when you see the premiums.

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