While comparing financing rates and crash safety ratings is important to make the best deal, it’s also just as important to compare insurance rates.
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A dealer can’t reasonably expect that you’ll have insurance when you excitedly walk onto the lot if you don’t yet own a car.
While not every used car buyer has insurance, those who do have a leg up on the others because their coverage will protect them as soon as they take ownership of the car. Here’s a guide to help you time when to buy your insurance:
- When you’re buying a used car, it’s important to compare insurance rates for several models before you go shopping. Doing this will help you determine which vehicles you can afford to buy and which vehicles you can’t
- You can get auto insurance quotes on multiple vehicles from multiple companies by simply having the year, make, model, and trim level
- Getting quotes on cars before you buy them is easy but you can’t actually purchase auto insurance on a car until you have its Vehicle Identification Number and you’ve signed a sales contract
- One of the main requirements for buying insurance is that the named insured has a financial and insurable interest in the car. Since you can’t suffer any financial loss until you own the vehicle, you can’t buy insurance on the car until that time
- If you’re buying a car from a dealership, the agent will ask you to present proof that you’re insured before you leave the lot with the car
Do you need your own insurance to test drive a used car?
You can put your finances at risk if you’re testing out a used car and you get into an accident. During a test drive, it’s the dealer’s responsibility to carry liability coverage and insure the vehicle. This insurance is in place to protect the dealer and not necessarily drivers who are taking the vehicles for a spin.
While you don’t legally have to buy insurance, the injured party can sue you for being negligent behind the wheel.
Read more: How to Sue Someone Who Has No Car Insurance
If you don’t have your own coverage, this can create issues for you that will land you in court defending yourself. Be sure to consider this before you test drive a car without at least a non-owner’s liability policy.
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When do you insure the pre-owned vehicle that you’re buying?
Test driving a car doesn’t mean that you’re going to definitely purchase it. You can’t buy insurance on a car that you don’t know that you’re going to buy, but you also can’t buy insurance on a vehicle that you don’t yet own. Under a
Under a standard auto insurance policy contract, you’re required to have an insurable interest in each car that you’re insuring.
An insurable interest means that you would suffer a financial loss if something were to happen to the property that you’re insuring.
If a car that you’re interested in is damaged on the lot by another driver, it doesn’t affect you financially. It’s not until you’re the legal owner of the car that you can buy an insurance policy on it.
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Read more: How Soon Do you Need Insurance After Buying a Car?
