January 25

How Long Do You Have to Get Insurance After Buying a Used Car?


How Long Do You Have To Get Insurance After Buying A Used Car?

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quick highlights

You must have auto insurance in place before you drive.

The rules vary, so call your insurance company before you buy the new car.

If you take out a loan, the lender will ask you to carry comprehensive and collision coverage.

Whether you purchase a new car, a previously owned car from a dealership, or a used car in a private sale, you will need auto insurance to drive.

 When buying from a dealership, you will need proof of insurance for the dealership to allow you to drive it away.

However, with a private sale, you will only have to show your insurance to the DMV, not the private seller.

This means that there’s potentially a gap in coverage from the time you purchase the car, to the time you drive it, and maybe even until the time you register it.

So, ‘How long do you have to get insurance after buying a used car?’

That depends on a few factors:

  • Do you have insurance already on another car, or are you purchasing a new policy?
  • What state do you live in? 
  • Is it a private sale, or are you buying through a dealership?

Let’s sort out what you need to do so you are properly and legally covered...

You Have Auto Insurance Already

Where you live matters, as the laws vary state by state. For example, in California you have 30 days from the day you first register your vehicle to show proof of insurance.

If you don’t have it within those first 30 days, your registration is cancelled and you’ll need to pay a fee to reinstate it.

In New York, there is no period of time allowed in between purchase and driving. You will need to have proof of insurance to register your vehicle. 

Looking up your state laws regarding grace periods for insurance is a critical first step to make sure you are covered and driving legally.

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Don't Make this Dodo Mistake

Watch out for this mistake!

Get the “Bundled Discount” when shopping for auto insurance by adding your homeowners or renters insurance to the deal.  Bundle discounts can be significant!  Sometimes as much as 10%.  

The second thing to consider is which company you’re purchasing your insurance through.

Most insurance companies have a grace period during which they will cover you even if you haven’t added the newly purchased car to your policy yet.

These vary from about 7-30 days depending on the insurance agency. If you are with Nationwide, for example, they allow for 10 days of grace to add the car to your policy.

Geico, Farmers, and Progressive all allow 30 days to add a car to your already existing policy.

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Of course, this does not apply to you if you live in a state that has no grace period and requires insurance at the time of registration.

It’s really easy to just give your current insurance provider a quick call and let them know right away, as it’s a simple and easy process to put your new car on and take the old one off your policy.

Usually just one phone call with the information they need, such as the Vehicle Identification Number (VIN) of the new or used car you’re purchasing, make, model, and year, and a few other details and you’re all set.

Some companies even have an app you can download to your phone.  These let you add vehicles, pull up your ID card, and make premium payments.  Super Easy!

If You Do Not Already Have Auto Insurance

If you do not currently have a policy with anyone for auto insurance, whether this is your first car or your old policy lapsed, you will need to purchase new insurance before you can drive your newly acquired car.

A dealership is not legally allowed to let you drive the car unless you show proof of insurance that complies with state law.

Even if you are buying your used car privately, you would still run the risk of being fined for not having it, should you be stopped by police. 

Compare Policies

Action Item:  When shopping for auto insurance quotes, ask if the company will sell you a one year policy term.  Most auto insurance companies only offer six month terms because they want to be able to change your rates more often.  Generally, rates only go up, so an annual term will allow you to lock in lower rates for a full year.   You can get started comparing quotes here. 

It’s best to chat with a few insurance companies prior to purchasing your vehicle, to gather quotes and find the best rate for your particular situation. 

If you haven’t yet chosen a car to buy, you can find quotes for different vehicles that you may be looking at.

Once you make your final decision, the dealership can send the information to the insurance company you’ve chosen.

If you are buying through private sale, it will be up to you to gather the information from the seller. 

Use this information for the purposes of buying insurance before you come pick up the car.

Comparison quotes are quick, easy, and free!

Here is a sad story...

Beth really wanted the Land Rover she saw for sale the other day.  

She liked the color and the price was in her budget.

Don't Make this Dodo Mistake

She had been using Uber since she moved out of her parent’s house last year.

With her new job and increased salary, she left it was time for her own ride.

She called the seller and arranged to meet with her after work the next day.

Beth wasn’t thinking about auto insurance as she drove away with her new SUV.

tips for success!

Dodo Tips

When buying Collision Insurance.  

Make sure to add the “waiver of collision” deductible.  This way, your deductible is waived if an uninsured motorist hits your car.  Adding this feature to your policy typically costs less than $30 a year.  Over 12% of drivers nationwide are uninsured

She was almost home when a guy ran out into the street, chasing his puppy.

Beth didn’t stand a chance.  She was going the speed limit, but still hit the guy.

Because the state laws put the motorist at fault, she was stuck paying $150,000 to cover the medical bills of the pedestrian.

two women holding keys in front of a white car with a blue banner in white font reading how long do you have to get insurance after buying a used car

Beth had to sell her new car to cover the bills and now has a monthly payment to make to the hospital for the next 10 years.

Don’t be like Beth!  Buy auto insurance before you drive away with your new ride.

Modern insurance companies, like Progressive or GEICO, typically have 24/7 call centers.  

You can buy insurance in 15 minutes or less with a simple phone call.

Bottom Line: How Long Do You Have to Get Insurance After Buying a Used Car?

It’s best to know what kind of insurance you want to carry and when you need your policy to start before beginning the process.

Using this information you can gather quotes from different companies for the vehicles you are interested in.

This will help give you an idea of the cost of insurance, so you can evaluate what you can afford going forward.

Once you nail down the vehicle you want to purchase, having quotes from different companies will assist you in making a decision on which policy is best for you.

Dodo Definitions

Insurance Term Explained:

Actual Cash Value:  This is the depreciated value of a used car.  Most auto insurance policies pay this amount if the vehicle is totaled and you have Comprehensive and Collision Coverage on the car. You can check your vehicle’s Actual Cash Value using this link

 If you are buying privately, ask the seller for the information your insurance company requires, such as the Vehicle Identification Number (VIN), number of miles, make, model, and year.

 If you’re purchasing through a dealership, they will take care of sending all that information.

You will be responsible for providing them with the policy number that you set up.

If you already have insurance on another vehicle, in most cases the coverage you have for that vehicle will cover you for 7-30 days.

When buying through a dealership, the salesperson will need a copy of your insurance once you’ve signed for the sale.

And finally, if you are financing the car, you will need a more comprehensive insurance package -  Liability, Comprehensive, and Collision. When you read the loan agreement, you’ll find that full coverage is typically required.

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Comprehensive coverage will pay to repair or replace your car if it's stolen or damaged in any way except due to a collision accident.

Collision coverage will pay for the vehicle to be repaired or replaced if its damaged in a collision accident.  

Liability covers you for the damage you cause to other people.  For example, if you rear end another car on the freeway, you are going to be “at fault” and be required to pay for the damages.  

It's a good idea to shop around with three different insurance companies to see which one will give you the best rates and the most coverage.


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