Do I need insurance before I buy a used car?

To legally drive a car in the United States, you will need insurance before you buy a used car. If you already have car insurance when buying a used car, let your insurance company know so they can update your policy. You will likely need to buy full coverage for your used car if you have a loan for the purchase, otherwise you will only need to meet state minimums.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Mar 23, 2022

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What You Should Know

  • To legally drive a car in the United States, you will need at least your state’s minimum car insurance before you buy a used car
  • Factors such as your location and your age may affect used car insurance prices 
  • In most cases, there’s no major difference between used and new car insurance 

When purchasing a used car, you’ll need to have at least your state’s minimum car insurance coverage required before you can legally drive. If you’re buying a new insurance policy, the amount of your rate will be determined by criteria such as where you reside and the type of used automobile you choose. You can also add your used car to your existing car insurance policy if you have one.

Read on to learn more about how to insure a used car and what coverage you need.

Do I need insurance before I buy a used car?

To legally drive a car, you will need insurance, regardless of whether it is new or used. It may be possible to purchase a used car from a private seller without having an insurance policy, but you will not be able to legally drive that car without it.

It’s a good idea to get car insurance estimates before you buy a used vehicle so you know how much it will cost to insure it. It will also make the process to purchase insurance easier if you have a quote in place. Continue reading to know more about if you need used car insurance and the process of attaining it.  

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If I already have car insurance, do I need a separate policy for my used car?

If you already have insurance on a car, you don’t need a separate auto insurance policy for your used car. You must notify your insurance carrier that you have purchased a used vehicle and wish to add it to your policy. You will be responsible for paying the difference if insurance rates change after you add your used vehicle.

Many insurance companies allow you to add a freshly purchased car to your policy for a limited time. Your existing insurance policy will cover your vehicle during this grace period, even if it hasn’t been added to the policy yet. Some insurers, for example, give you 30 days to add a new vehicle to your insurance.

The grace period is not “free coverage”. When you do call to add your car, the coverage cost will be added from the date of purchase.

Remember, you may not be covered for damages you cause or harm caused to your car if you get into an accident after your insurer’s grace period has expired. To prevent any unexpected coverage breaches, it’s a smart idea to add your new vehicle to your old insurance as soon as possible.

How much does used car insurance cost?

How much should you should be paying for car insurance depends on various factors. This means used car insurance prices will vary depending on: 

  • Where you are located 
  • Your state’s minimum coverage requirements
  • Your age (young adults and older adults may face a higher auto insurance estimate)
  • The car’s make and model 

Learn more about other factors that may affect your car insurance quotes and how insurers calculate your car insurance rate

New Car Insurance vs. Used Car Insurance

In most cases, there’s no major difference between used and new car insurance. Standard coverages including liability, uninsured motorist (UM), and personal injury protection (PIP) have similar considerations. You may not need comprehensive and collision coverage if your used vehicle isn’t worth much and you can handle the cost of repairs or replacement yourself.

Is it cheaper to insure a new car or a used car?

It’s possible that insuring a used vehicle is less costly than insuring a new one, particularly if you have comprehensive or collision coverage. Because used cars are typically less valuable than new cars, they might be less expensive to fix or replace. Car insurance premiums, on the other hand, are determined more by the specifics of the car and your policy, such as the vehicle’s make and model, your location, and the amount of coverage you have.

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How long do you have to get insurance after buying a used car?

Before driving a used car home from the dealership, you’ll be required by law to provide proof of insurance in almost every state. If you do not have insurance when you buy a used vehicle, you will be unable to drive it off the property until you do. If you already have insurance, you can add the used car to your coverage. However, depending on the insurer, you may only have a week to a month to do so after purchasing it.

Owning a car necessitates the purchase of insurance. It safeguards both your investment and other drivers on the road. However, the amount of time you have between purchasing and insuring a used car varies by state.

If You Already Have Car Insurance

If you currently have an insurance policy for your existing vehicle, that coverage will extend to the car you’re buying for a limited time. It varies by state, but it usually lasts between seven and 30 days.

It’s best to notify your insurance company as soon as possible if you’ve purchased a new vehicle. It’s better if you can do it on the same day. That way, they can make sure you’re getting the lower auto insurance rates and getting the complete coverage you need. It will also assist in avoiding any issues if the vehicle is damaged.

All you have to do in most circumstances is contact your insurance carrier and give them the year, make, model, and VIN (vehicle identification number). In some states, they may also require the purchase price. This will allow them to withdraw your old vehicle from your insurance and replace it with your new car.

If You Don’t Have Car Insurance

in almost every state in the United States, you must have insurance to drive so get a policy before driving a used car home. Before heading to the dealership, you should compare quotes and contact insurance companies or local agents. This will allow you to make a comparison of prices from several insurers for various used vehicles.

Do you need full coverage on a used car?

When purchasing a used car, you will simply require liability insurance. This covers the expense of any harm you do to someone else’s property or person. Liability, as well as the optional comprehensive and collision policies, are all included in full coverage car insurance.

If you decide to finance a used car, you’ll need full coverage. Until the debt is paid off in full, most lenders will need you to have full coverage. This safeguards their investment.

If your vehicle is less than 10 years old, you should think about keeping it fully insured. You may also figure out how much your car is worth. If your annual comprehensive and collision payment is equal to 10% of the value of your automobile, you might consider eliminating the coverage. 

Insuring a Used Car: The Takeaway

Before buying a used car, you will need to buy car insurance to legally operate the car. It’s advisable to contact your insurance company as soon as possible if you’ve purchased a new vehicle if you currently have an insurance policy for an existing vehicle. Many insurance providers give you a grace period that may enable you to add a newly purchased car to your policy. If you don’t already have a policy, compare car insurance quotes before you buy a used car so you can figure out how much it will cost to cover it.

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