How to get car insurance when buying a car on the weekend
Last updated: October 2022
Thinking about doing some weekend car shopping? You might be wondering about insurance requirements, and how to even get insurance on the weekend. Do you need insurance before you buy a new vehicle? Are you able to drive off the lot without it? In most instances, it’s best to have insurance lined up before or at the dealership. And below you’ll find out why, along with a few scenarios to consider.
Luckily, insuring a new car has never been easier.
Confirm your car insurance policy before buying a new car
In most states you need insurance to legally drive on the road. That means you’ll need to be insured before you can legally drive your new vehicle off the lot. Some dealerships may require it, too.
If you already have insurance in place, notify your insurer beforehand. Otherwise, you can typically purchase auto insurance online from your phone or a computer.
Adding a new car to your insurance policy before you buy
Adding a new vehicle to your current auto policy is typically fairly easy to do. If your auto insurance company has a mobile app, you may be able to add a new vehicle to your current policy online at the dealership. Note that some standard auto insurance companies may not insure certain luxury vehicles or vehicles with salvage titles. Another reason it’s best to check with your car insurance company ahead of time.
Can I apply my current policy if I’m replacing my older car?
If you decide to purchase a new or used car during the weekend and your insurer isn't available to set up coverage for your new auto, some insurers provide a grace period. But as mentioned above, you may be able to easily add a vehicle to your policy online.
A different vehicle may have different coverage needs and requirements – but you can apply some of the same coverages to your new vehicle as your old one, as long as they’re applicable.
If, say, you plan to drive your new vehicle more, however, you may want higher coverage limits. Different vehicle parts and materials might also require increased limits. Your insurer will let you know, and if you’re adding your vehicle through a mobile app, it may automatically apply the needed coverages and limits.
On the other hand, depending on your new vehicle’s make and model, crashworthiness, safety features and more, you may be able to qualify for new auto insurance discounts. Some insurers even offer discounts for brand new vehicles.
There's always the option of canceling your policy and purchasing a new one from a new auto insurance company, but it might be easier – and faster – to add your new vehicle to your existing policy.
What is a car insurance grace period?
A car insurance grace period is the amount of time between buying a vehicle and buying car insurance that an insurance company will allow. If you have an auto insurance policy and you buy a new vehicle, your insurer may give you a certain amount of time before you have to notify them. Depending on the insurance company, grace periods can range anywhere from a week to 30 days, according to Bankrate.
What if I’m buying a new car, but not replacing my old one
If you're buying a new vehicle but not replacing your old one, you can simply add it to your existing policy. It's easier than purchasing a brand-new policy, plus many insurers offer a discount if you have more than one vehicle on it.
Depending on your new vehicle, you may want different coverages and limits than your existing vehicle. As mentioned above, if you plan on driving your vehicle more, or it has expensive parts, it may need higher coverage limits. If you’re leasing it, your lender may require you to purchase gap insurance.
But if you plan on driving it less, or it has a higher crashworthiness rating than your existing vehicle, it may require less coverage and be cheaper to insure.
Call your insurer or get a quote online
If you have any questions, you can call your insurer. Some insurance companies offer 24/7 customer support. If you don't yet have insurance, you can get quotes online fairly easily at the dealership. Better yet, if you know the vehicle you want to get beforehand, consider getting various quotes before going to the dealership.
Find out coverage requirements for financing or leasing a car
The scenario may change for those who are financing or leasing a car. Typically, you will have to show proof of insurance to your dealer to be able to take possession, according to David Kelleher, senior property and casualty insurance specialist at the NAIC. In this case, a weekend car purchase could delay your ability to drive home in your new vehicle if you have not arranged specific coverage for that vehicle in advance.
If you only carry liability coverage on your current vehicle, the dealer is likely to require you to add collision and comprehensive to help ensure the lender's risk is sufficiently covered, says Peterson.
Read the fine print for your new or used car loan or lease
Leasing contracts also may contain a so-called "forced place" clause. This allows the leasing company to arrange for insurance and add it to your monthly fee, if you don't provide proof of insurance within a specified window, says Kelleher.
You may also want to consider buying gap coverage if you're financing or leasing your car. This helps cover the difference between what you owe on your vehicle and what your vehicle is worth at the time of an accident or theft.
Does car insurance cover test drives?
If you're test driving a car with the intent to purchase it for your personal use, most insurers cover you for the use of "non-owned cars" including test-drive vehicles and loaners.
However, dealers are required by law to insure their cars, and that insurance would typically cover an accident that occurs during a test drive. Keep in mind, though, that in some instances, a dealer's insurer may seek reimbursement from you or your insurer if you cause an accident during a test drive.
When you test-drive a privately owned vehicle, the same rules hold: The car owner's insurance typically covers damage from an accident. The owner’s insurance would also cover liability or other damage, not just damage to the car during your test drive. In that case, you would be considered a "permissive driver" and generally wouldn't be on the hook for repairs. It's a good idea to confirm that the owner has an insurance policy on the vehicle before you take it for a test drive.
When it comes down to it, if you know you're in the market to buy a car and you're planning on visiting a dealership over the weekend, consider talking to your insurer to confirm that you're prepared to make a purchase should you find that perfect vehicle.
Car buying insurance FAQs
Here are some commonly asked questions around buying insurance for a new car.
You may be able to purchase a vehicle without insurance, but depending on the dealership, you might not be able to drive off the lot without coverage. If you know which vehicle you want to buy, get quotes online. If you’re already insured, notify your insurance company.
Not necessarily. But remember, in the vast majority of states you need car insurance to legally drive on the road.
Some auto insurance companies provide "grace periods" for new vehicle purchase. Depending on your state, and insurer, grace periods can be between 7 to 30 days.