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How Soon Should I Purchase Insurance After Buying a Car?

Should I Buy Insurance Before or After I Buy a Car?

Generally, dealerships require you to have insurance before you can drive a car off of their sales lot; they don’t want to be responsible for an accident that might occur after your purchase. Therefore, you may need to purchase insurance before buying a vehicle. 

Before you begin car shopping, you should research which make and model will best suit your lifestyle. Not only will this ease the buying process, but it will also help you determine the type of insurance coverage you will need. However, you do not have to buy insurance until you legally own the car. Meaning, if your contract becomes null and void or the financing falls through, it is not your responsibility to insure the vehicle.  

Additionally, each state regulates this rule differently; some require you to purchase insurance before you can register your vehicle, while others only require insurance coverage after registration. For this reason, you should consult with your auto insurance company to determine when you should register your vehicle with them.

What is a ‘Grace Period’?

When you purchase a new car from a dealership or a private party, you may have insurance coverage for a limited amount of time through your old insurance policy, called a ‘grace period’. However, state law does not regulate these ‘grace periods’; as a result, not every insurance provider will offer this service to their clients. 

If your insurance company provides this service, it will generally last anywhere from 2 to 30 days. After your grace period ends, you must register your vehicle with your insurance company. Otherwise, you will not have insurance coverage if an auto accident occurs.  However, if you are a first-time buyer without an active insurance policy, a grace period will not apply; you will have to purchase a new insurance policy as soon as possible.

What Happens if I get in an Accident During my Grace Period?

Suppose an accident occurs during your grace period. In that case, you will be covered by your active auto insurance policy, even if you haven’t registered your vehicle with your insurance company. Many insurance companies provide this benefit as a courtesy to their clients. However, if you file an insurance claim during your grace period, your insurance premium will still rise. Furthermore, if an accident occurs after your grace period has ended, you will not receive any insurance coverage.

What If I am a First-Time Buyer With no Previous Insurance Policies?

If you are a first-time buyer and do not have an active auto insurance policy, you will not have a grace period. Therefore, you must purchase an auto insurance policy as soon as possible. 

However, suppose you continue to drive your vehicle without purchasing auto insurance. In that case, you risk hefty fines, as well as liability for any car accident that might occur. If you are in an accident without insurance, you will be liable for the medical expenses and property damage suffered by the other party.

Were you or someone you know involved in a recent auto accident? Call Auto Accident Care Network now at 801-683-1948 to connect with a live care advocate. Our team at AACN can connect you to trusted attorneys and doctors to schedule a free legal consultation, a free thirty-minute massage, and a no-cost medical exam!

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