Just bought a used car? Here’s what to know about insurance

Yes. In almost every state, you need proof of insurance before driving a newly purchased vehicle, even if it’s from a private party.

• Dealerships often won’t let you drive off the lot without insurance.
• Private sellers don’t check, but you’re still legally and financially responsible from the moment the sale is finalized.

You’ll need an insurance policy before you buy a car, explains Kelley Blue Book (KBB). If you already have car insurance, your current coverage may extend temporarily to the new vehicle, but you’ll want to check that before you drive away.

Driving a car without insurance, even right after buying it, can result in:

• Fines and penalties
• Suspension of your driver’s license or registration
• Higher future insurance premiums due to a coverage lapse
• Full personal liability if you’re in an accident

It’s not worth taking any risks, so get coverage before you drive your new vehicle.

Some insurers offer a grace period (usually 7–30 days) to add a new car to your policy if you already have insurance. However, you’ll need to keep in mind that:

• Grace periods only apply if you’re already insured
• If you’re uninsured at the time of purchase, you must get a policy before driving the vehicle
• Rules vary by state and insurer, so check with your provider directly

To get coverage in place before you pick up the car:

1. Gather the new vehicle info (VIN, make/model, year, mileage)
2. Compare quotes online, ahead of time
3. Choose your desired coverage (at minimum, you’ll likely need liability coverage – check your state’s requirements, first)
4. When you’re ready to buy the car, purchase the policy and access your ID card
5. If applicable, add the car to your existing policy

Once covered, you can legally register the car and drive with peace of mind.

To transfer ownership at the DMV, you’ll usually need:

• Proof of insurance
• The signed title from the seller
• Valid ID
• Completed registration forms
• Payment for sales tax and registration fees

You may also need an emissions or safety inspection, depending on your state.

• Go with liability-only coverage if the car isn’t worth much
• Bundle your car insurance with home, condo or renters insurance for discounts
• Raise your deductible to lower monthly premiums
• Use a telematics program to track safe driving and earn savings
• Ask about auto insurance discounts (e.g. multi-car or student discounts)

If the car is financed, you’ll likely be required to carry more than just liability coverage, such as comprehensive and collision coverage.

Don't let the excitement of getting your new car override responsibility. Make sure your used car is insured before you hit the road. It’s easy, fast, and absolutely essential.