Buying a used car is a great way to get a vehicle in good shape without having to spend a huge amount of money. Once you have purchased your vehicle, you have to make sure you have the right coverage necessary to be able to operate it. Let’s take a look at what is needed to get insurance for your (new!) used car.
How long do you have to get insurance after buying a used car?
If you are buying a vehicle from a dealership, the likelihood is you will not be able to take the car from the lot unless you have proof of insurance. As a rule of thumb, you should definitely have at least the minimum coverage, which is liability-only, before you buy and operate a motor vehicle.
If you are buying a used vehicle from a friend, through a listing, or in any other private scenario, the individual you purchase from will probably not ask to see proof of insurance. If you do not have coverage when the purchase is made, it’s best to have someone who is insured accompany you to operate the vehicle until you have a policy. When the vehicle is at your property, you can then take steps to obtain coverage. It’s not advisable to drive the car until a policy is in place.
There’s no time limit in place when it comes to obtaining coverage – only that you have at least liability-only before you operate the vehicle.
What if you have to take out a loan to purchase the vehicle?
Your bank will require you to have comprehensive coverage in order to take out a loan for a used car. Until you’ve paid off the loan, the bank owns the car, in effect. They’ll want to protect their investment. Even if your state only requires you have liability-only coverage, your bank will insist you have full coverage before authorizing the loan.
I already have a policy – will it cover my used car purchase?
Many insurance companies will have a grace period in place which allows you to give your agent notice of your purchase. This grace period means that your vehicle will be covered while the details are being changed from your previous vehicle to your new purchase. You should contact your insurance agency to confirm all of the details before operating your new vehicle.
Will my premium be cheaper for a used vehicle over a new one?
Insurance policies are very specific – there are many factors involved when it comes to finalizing the cost of a premium. Some of these factors include the age of the vehicle, mileage, safety features, and personal information such as the driver’s age and vehicle history – traffic violations, collisions, and previous claims all influence the end price. In general, a used vehicle is cheaper to insure than a brand new one, but it depends on the above factors and also the agency you choose to have coverage with.