Do I Need Insurance If I Have Just Bought the Car?


If you have purchased a vehicle and don't intend to drive or register it, you probably don't need to purchase insurance. Most states require proof of insurance for registered cars, so if you intend to drive or register the vehicle, expect to provide insurance coverage. If you're purchasing from a dealer, you'll need insurance before you drive the vehicle home.

State Rules

Check with your state's motor vehicle department to determine its rules and requirements regarding newly purchased vehicles and insurance requirements. Most states require a minimum liability policy on registered vehicles. However, some states allow drivers to operate purchased vehicles on the roadway if they are registered within a certain number of days and the drivers are already insured. Other states can impound your vehicle or issue a ticket if you drive a car without insurance or registration. Determine your state's rules before you purchase so you can obtain insurance if necessary.

Obtaining Insurance

If you find your state requires insurance for newly purchased vehicles or you intend to drive the car home, contact your insurance company. You insurance company is also aware of state rules and can provide you with proper proof of insurance, if necessary. Have your vehicle identification number, year, make and model ready to provide to your insurance provider. If you financed your vehicle, expect to provide insurance before you can obtain your loan check, a requirement of most lenders.

Dealership Purchase

Dealers are required to follow all state laws and regulations, so a dealer has to make sure that a sold vehicle leaves its lot legally. Your dealership must either register your vehicle and complete your motor vehicle paperwork with you or supply you with a transportation or temporary plate to return home. Expect your dealership salesperson to require proof of insurance before you leave the dealership unless your state allows differently. If you don't have an insurance provider, ask your salesperson for help; salespeople work with different insurance providers and can help you obtain your state's or lender's required insurance coverage.

Maintaining Coverage

Even in states that allow a grace period between purchasing a vehicle and registering it, expect to consistently maintain your state's required liability policy once you acquire necessary coverage. Insurance companies electronically notify your state's motor vehicle department and lien holder, if applicable, if your insurance policy cancels or lapses. If it does, your state may suspend your license or enforce fines. A lien holder's repercussions are noted in your contract, but may include repossession.

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