Do You Need Insurance to Buy a Car?

Do You Need Insurance to Buy a Car?

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If you’re on the lookout for a new car then you have a lot of decisions to make. This is an exciting time for a driver, as you weigh out the different options on the market. With makes, models, mileage and more to think about – there’s a lot to consider.

With your heart set on the car you want, you’re ready to move forward in the sale. However, you don’t have car insurance and are wondering whether you can go ahead. Never fear, we’re here to answer the question of ‘do you need insurance to buy a car?’, so you can get out on the road.

First Things First

The answer isn’t quite as straightforward as you may think, as there are some differences in the details that may impact your need for car insurance. The first thing to consider is whether you already have an existing insurance policy in place on another vehicle. If this is the case, then you may well be able to drive your new car right off the lot.

You’ll also have to consider what your policy covers. Some policies cover you, the car that you’ve registered and other cars that you drive. Others don’t include this type of coverage, so check through the policy document before you get behind the wheel.

If you’re going from a cheaper car to a much more expensive one, then your policy may not cover the full cost of the new car. These limitations will be covered within your policy too, so it’s best to take a look through this.

If this is your first car or you don’t have insurance on another vehicle, then this may not be the case. Without an insurance policy in place, you run the risk of being prosecuted as an uninsured driver and if you are in an accident you’ll have to pay the damages out of pocket.

Some car dealerships may offer you temporary insurance so you can take your new car home. This can last a few days or a few weeks, though the level of coverage may not be fully comprehensive. As you get accustomed to driving your new car, you’ll want to ensure you’re covered from any bumps.

The penalties for driving without insurance vary from state to state. Generally, this is treated as a serious infraction, with heavy fines associated. You could also potentially lose your driver’s licence and be suspended from driving for up to four years. Finally, should you be uninsured and in an accident, the injured party can sue you for damages which could leave you in a sticky financial situation.

Technically speaking, there’s little to stop you from buying a car without insurance in place. However, this carries many legal burdens and you shouldn’t do so without considering alternative courses of action.

Make Sure That Your Paperwork is in Order

It’s not just the insurance that you need to arrange when getting a new car. You’ll also need to make sure that the rest of your paperwork is in order. Check that the title is correctly switched into your name. If the title hasn’t been handled properly, you could find yourself in legal trouble further down the line.

Processing this paperwork through the DMV is simple, so don’t delay in getting it sorted. Without the correct paperwork, you’ll find it difficult to change your licence plate or sell the vehicle. The seller must also endorse this, meaning that it’s easier to do this at the point of sale.
Take a look at the rules that apply in your state for complete clarity on the situation.

Now that you know more about the question ‘do you need insurance to buy a car?’ you’re ready to go out there and get that new car. Just do your research and make sure you’re covered throughout the process. Then you can simply enjoy driving your new vehicle.