How long after buying a car do you need to get insurance coverage?

Buying a car takes a lot of preparation. Since it’s one of the larger items that you’ll purchase in your lifetime, it’s very important that you research all of your options before you decide on a model or a dealership.

You may not be able to test drive a car and negotiate the sales price before you go on your shopping excursion, but you can take the steps that are necessary to buy insurance on your soon-to-be vehicle. When you live a busy life, it’s easy to put off important business.

Do you have to have insurance to buy a car? Unfortunately, if you don’t have the right auto insurance policy in place when you buy your new car, you could be left waiting in the lobby. It’s important to time your insurance right.

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Read on to discover four tips to help you know exactly what to do.

#1 – Shop for Auto Insurance before You Get a New Car

In fact, when you’re looking for the best car for you and your family, it’s best that you shop for car insurance before you start shopping for a car.

When you have a general idea of how much insurance will cost on a car, you can decide if you can afford it.

Every vehicle has its own unique rates. Even the same models can have different rates if one vehicle is newer than the other. The rates for each vehicle are dependent, in part, on the car’s grade through the Insurance Institute for Highway Safety.

They are also dependent on the following:

• Car size
• How much a car costs to repair
• How expensive parts are
• The number of claims that are filed by drivers in the same type of car

Read More: Buying Car Insurance for Your New Car

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#2 – The Dealer’s Insurance Coverage Will Cover Test Drives

You don’t legally have to have insurance until you own a car. Since the inventory that your test driving is owned by the dealer, the dealer can’t require you to have insurance.

You’re free to test drive as many cars as you want at any legitimate dealership without having your own existing policy.

While the company has its own policy to protect them from a lawsuit after an accident, there’s still a chance that someone injured in an accident can sue you for being reckless.

So even though you’re not required by any type of vehicle code to have insurance on a car you’re test driving, it’s in your best interest to have some protection.

#3 – You Must Have Insurance to Buy a Car

Do you buy insurance before or after the car? When insurance is mandatory, you must have an actual insurance policy on a car as soon as you become the vehicle owner.

Since you’ll become the owner of any car that you buy while you’re still at the dealership, you need to have insurance in place at some point while you’re buying your car before you even go home.

Every state has different mandatory insurance laws. A couple of states don’t require insurance, but most do. What the state has mandated as compulsory and what the dealership requires are two different things.

If you’re financing a car, the dealer must verify that you have full coverage insurance on the car.

Full coverage is required on cars that are being financed because it’s a condition of your auto loan.

It doesn’t matter if you’re financing your car directly through your credit union or you’re getting a loan through the dealership, you still need to demonstrate evidence that you have comprehensive and collision to protect the collateral.

#4 – Your Existing Coverage Will Extend for a Period of Time (Grace Period)

How do you buy insurance on a car you just bought? You might feel rushed after learning that you have to have insurance immediately after buying a car, but you’ll be happy to hear that it’s all a lot easier when you already have a policy in place.

If you already own a car that’s insured in your name, your existing policy will give you some extra time to insure the car.

If you have a standard personal auto policy, the terms of the policy say that your coverage will extend automatically to a car that you buy during the policy period. Even though coverage does extend without a phone call, it won’t protect you forever.

Here are some things that you need to know about newly acquired vehicle coverage:

• Coverage will extend to an additional car for several days
• Coverage will extend to a vehicle replacing another on the policy for the rest of the term
• If you haven’t called your insurance agent to add the new car by the end of the coverage period, your coverage will lapse
• You will get the broadest coverage option that you carry on the car
• If you don’t have full coverage, you’ll receive four days of comprehensive and collision coverage on the new car

If you don’t currently have insurance, now’s the time to buy a policy. Start getting quotes on the cars that you like the most and budget for insurance premiums by entering your ZIP code below.

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Case Studies: Timeframe for Getting Insurance Coverage After Buying a Car

Case Study 1: Prior Insurance Policy

John recently purchased a car and had an existing insurance policy for his previous vehicle. He contacts his insurance company within 24 hours of purchasing the new car, providing the necessary details and requesting to transfer his coverage. The insurance company makes the necessary adjustments to his policy, ensuring that he is adequately insured for the new vehicle.

Case Study 2: Immediate Insurance Purchase

Sarah buys a car from a private seller and is not currently insured. Understanding the importance of insurance coverage, she contacts an insurance provider immediately after the purchase. Sarah provides the necessary information about the car and her driving history, and the insurance company offers her a policy with effective coverage starting from the moment of purchase.

Case Study 3: Dealer Insurance Coverage

Mike purchases a car from a dealership and inquires about insurance coverage. The dealership offers a temporary insurance policy that provides immediate coverage for a specified period, typically ranging from a few days to a week. Mike accepts the dealership’s insurance offer and then contacts his preferred insurance provider within that timeframe to arrange for a long-term insurance policy.

Case Study 4: State-Mandated Grace Period

Samantha purchases a car and is aware that her state has a grace period for obtaining insurance coverage after buying a vehicle. She researches the specific requirements and learns that she has seven days to secure insurance coverage. Samantha contacts insurance providers during this grace period and purchases a policy within the allotted timeframe to comply with state regulations.

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