How does insurance work when buying a new car?

General Discussions Forum
1

When you buy a new car, how does insurance work? Does the dealership cover the car when you drive it home, or do you need to have your own insurance before leaving the lot?

Also, insurance companies need the VIN to add the car to a policy, but what if you don’t know exactly which car you’re getting until you sign the paperwork?

I’m a little confused on how this process works.

2

You need insurance before driving off the lot. Most dealers won’t let you leave without proof of coverage. You can call your insurance company from the dealership and add the new car. They’ll send you proof of insurance within minutes.

3

@Niko
Got it, thanks for explaining.

4

If you’re in the U.S. and your state requires insurance, you can handle it right at the dealership. Sit at the salesperson’s desk, call your insurance company (or get a quote online), and they’ll send proof of coverage instantly. Once that’s done, you’re good to go.

It’s a good idea to get a quote in advance, though. That way, you won’t be caught off guard by the price.

5

I bought a 2024 Accord in January and have Allstate. I was insured under my old car (a 2014 Chevy Sonic) until my policy renewed in March. I switched the cars over, but my insurance card still showed my old car for two months.

Honda didn’t care as long as I had insurance. They didn’t even ask to see proof—just my driver’s license.

Edit: My online policy showed the correct car, but the physical card still had my old one until the renewal.

6

If you already have insurance on another car, most companies will extend coverage to your new car for a few days. But you should call and confirm first.

Insurance rates are crazy right now, especially for new cars. Unless something changes, I don’t see myself buying a brand-new car again anytime soon.

7

@River
What’s a good car age to buy if I want to avoid the high insurance rates?

8

Gray said:
@River
What’s a good car age to buy if I want to avoid the high insurance rates?

It really depends on your insurance company. Rates are based on a bunch of factors like your age, driving history, and the type of car.

The best way to check is to get the VIN of the car you’re considering and call for a quote. Compare a few different companies to see how much the rate varies. If it’s too expensive, start looking at older models and do the same thing.