How Soon After Buying A Car Do You Need Insurance?

If you’ve just bought a brand new car, you’ll need to check with your existing provider or find a new policy to ensure your car is road-legal.

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Written by:

Dash Lewis , Writer

Written by: Dash Lewis Content Writer

04/03/2024 02:30 PM

Key Points:

If you have car insurance, you may have a grace period of seven to 30 days before you need to acquire separate coverage for your new vehicle.
If you don’t have an existing auto insurance policy, you’ll need to purchase one before you can drive your new vehicle.
Drivers pay an average of $1,968 per year or $164 per month for full coverage car insurance, which is recommended for new vehicles.

Wondering how soon you have to get insurance after buying a car? In this article, we’ll answer some of the most commonly asked questions about purchasing auto insurance.

Learn more about the timeline for getting insurance, then take a look at some of the best car insurance companies in the country. If you’re ready to purchase an auto insurance policy now, enter your zip code below to start comparing quotes. We recommend talking to insurance agents and getting at least three quotes so you can compare coverage and price.

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How Soon Do You Need Insurance After Buying A Car?

If you currently have auto insurance on a car, you typically have a grace period of seven to thirty days before you have to report your new car to your insurance company. Your current policy should extend to your new car automatically during this period of time, but check with your provider to confirm.

If this is your first car purchase and you don’t have car insurance coverage already, you have to buy insurance before you can take your new car home. Remember, it’s illegal in almost every state to drive a car without proof of insurance, and the consequences of driving or being involved in an accident without proper insurance can be severe.

Keep in mind that the process is the same for new and used cars. You need full coverage to take possession of the vehicle.

State Laws On Auto Policy Grace Periods

Some states require car insurance companies to provide a written letter with the intent to cancel your plan before doing so. In short, it all comes down to your policy and your state laws.

When reading through state laws on car insurance policies, look for grace period and cancellation regulations.

Some states require companies to give you 10 to 20 days to get back on track with payments. In other cases, such as in Wisconsin, car insurance companies can cancel your plan the moment you miss your due date.

How Long Is A Car Insurance Grace Period?

As we mentioned, grace periods vary between 24 hours to a month–quite a large range. State car insurance laws also come into play if your plan lapses.

All but two states (New Hampshire and Virginia) require some form of car insurance at all times, and even those require confirmation from the Department of Motor Vehicles (DMV) before driving without insurance. No matter where you live in the United States, you can’t simply start driving without some form of documentation.

The specific length of a grace period and steps that must be taken before a lapse in coverage come down to your location and your plan. If possible, get this information in writing from your company before you face late payments or allow for a gap in your coverage.

Can You Use The Grace Period Every Month?

Typically, car insurance companies place limits on how many times they will accept late payments. If your company has no limits on how many times you can take advantage of your grace period, it’s still better to try and pay insurance premiums on time.

Many providers charge late fees or raise premiums when you renew your auto insurance, significantly adding to your overall insurance rates in the long run.

Do All Providers Offer A Car Insurance Grace Period?

Not all providers offer a car insurance grace period, so it’s important to talk to an insurance agent about plan details. Some companies may even allow a specific number of late payments before enforcing stricter regulations.

Most companies don’t want to lose you as a customer over one late payment, so be sure to alert your company of any payment issues.

Should You Buy A Car Or Insurance First?

In most cases, you want to purchase at least liability coverage before you buy a car. The exception to this is if you already have an insurance policy for a different vehicle.

If you’re adding a vehicle to your policy or replacing one, your existing policy should cover the new car too, so you don’t need a new policy before you drive the vehicle home.

While you can purchase your new ride first, it’s easier if you can get the car insurance policy first so you can take possession of your new ride on the purchase date.

Here are a few more things you should know about insurance when buying a car:

	When You Already Have Insurance	When You Don’t Have Insurance
New Car	You have a 7- to 30-day grace period (depending on your state) to tell your car insurance company about the new vehicle.	You must buy insurance before taking possession and driving the car off the lot. If you don’t, you won’t be able to take possession of the vehicle.
Used Car	If you know exactly which car you are buying, give the VIN, purchase price, and other information to your insurance company.	You must buy insurance before taking possession and driving the vehicle off the car dealership lot. Independent sellers don’t usually ask for your insurance information, but driving without the state minimum level of coverage or proof of financial responsibility is illegal.
Financing or Leasing a Car	Be sure your current insurance includes the collision coverage and comprehensive coverage required for your car loan or lease.	Be sure you have each type of coverage required for your loan or lease. You’ll need at least liability insurance, and a lender may ask for additional coverage like gap insurance.

How Do I Get Proof Of Insurance Before Buying A Car?

If you already know exactly which car you’re going to buy, you can pre-purchase insurance with information like the vehicle identification number (VIN). We recommend comparison shopping by contacting a variety of auto insurance companies so you know you’re getting the best coverage.

When you buy a vehicle from a dealership, representatives can also help you find the right coverage for your new car on site. You’ll be able to call an insurance company from the dealership to start a policy once you’ve picked out the car you want.

In the event that you already have car insurance (possibly for another car at home), you can show your insurance card at the dealership.

Can You Buy Car Insurance Over The Weekend?

It’s important to know how purchasing insurance works when car shopping. Some car insurance companies are open on the weekend, but in general, you’ll need to wait until a weekday to add a vehicle to your policy or purchase insurance for the first time.

How Soon After Buying A Car Do You Need Insurance: Our Take

Insurance requirements for personal vehicles vary by state. If you’re insured, check with your existing insurance provider or DMV for up-to-date information on insurance requirements, including grace periods, the amount of coverage required for your state, and more. If you’re ready to shop for and compare car insurance quotes, we recommend starting with the providers below.

Our Recommended Car Insurance Providers

When shopping for new car insurance, it’s smart to compare quotes. When we researched insurance industry leaders, Progressive and State Farm were two providers that stood out for extensive coverage and reasonable rates.

Progressive: Best For Usage-Based Insurance

If you’re in your teens or have a DUI in your driving history, you’re considered a high-risk driver. Getting affordable coverage can be difficult, so we recommend looking into Progressive car insurance.

There are many perks to becoming a Progressive customer, like access to the Name Your Price^® tool. The tool allows you to start searching for auto insurance with the amount you want to pay, then shows you plans that fit within your budget.

Plus, there’s the usage-based Snapshot^® program that can be a good choice for people who don’t drive very much. According to the Progressive website, drivers save an average of $231 per year using Snapshot.

State Farm: Best Overall Provider

State Farm is the largest insurer on the market. The insurer has a variety of discounts and mobile apps like Steer Clear^® and Drive Safe & Save™. Steer Clear is a driving refresher program that encourages safe driving habits in customers under the age of 25, while Drive Safe & Save monitors driving habits for drivers of all ages to help them save on car insurance.

Along with standard coverage, State Farm has extras like rental and travel expense reimbursement, rideshare coverage, and roadside assistance.

When Do I Buy Insurance For A New Car?: FAQ

Below, we talk about the common questions drivers have about buying insurance after purchasing a car:

How much will insurance cost for my new car?

Based on our research spanning dozens of insurance companies across the country, you can expect to pay an average of $1,968 per year or $164 per month for full coverage car insurance, which is recommended for new vehicles.

Car insurance costs vary based on many factors. Your individual car insurance rates will change based on your driving record, the type of vehicle you insure, your credit score, and other details about your life and driving habits.

Can I drive a car I just bought without plates?

If you have a car without license plates, you’ll have to have it delivered to your house. In most cases, you can’t drive or even park it on a public road until you have registration and insurance. When you purchase a car from a dealership, it will have temporary license plates.

What happens if I'm involved in a car accident before I have a chance to notify my insurance company of my new car?

If you’re in an accident before you have a chance to notify your existing insurance company of your new car, you should still be covered up to the same liability limits on your policy, but you should check with your provider to be sure.

Is there still a grace period if you buy a car from a private seller?

When you buy a car from an individual, your current auto insurance coverage grace period should apply. You have the same amount of time to notify your provider as if you were buying the car from a dealership, which can be up to 30 days in some states.

What happens if I have a lapse in coverage?

It’s important that you avoid having a lapse in coverage. A lapse in coverage not only leaves you unprotected, but it can also work against you when you’re trying to get coverage later on. Auto insurance companies see a lapse in coverage as a red flag and may increase your rates as a result.

How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

Dash Lewis Content Writer