Car insurance is required by law in almost every state, and whether a driver is buying from a dealership or private seller, they need used car insurance before they can legally drive the vehicle. Here’s a closer look at what drivers need to know to protect themselves and their vehicles.
How does insurance work when buying a used car?
Used car insurance is very similar to auto insurance policies for new vehicles. Almost all states require drivers to have some liability insurance. This pays damages if the policy holder harms another person or damages property while driving.
Many car insurance policies also include protection for the car itself. Although this is not required by law, lenders usually will not approve a car loan unless the driver has a collision and comprehensive car coverage. That way, if it gets collected in a wreck, the lender can still recover the value of the car.
Buying from a used car dealer
Used car dealerships require all drivers to provide proof of insurance before they can drive any vehicle off the ground. For those who do not already have insurance, it is important to purchase an insurance policy in advance so that they do not run into any hurdles.
Buying from a private seller
Private sellers may not be strict about proof of insurance before they let someone take a test drive or buy their car. But this does not change the law. Drivers still need at least minimal government liability coverage in order to drive legally.
How to get insurance before buying a used car
Here are the most important steps a driver should take to get insurance before buying a used car:
Select the best policy type
First, the driver needs to think about the type of coverage he is looking for. They will need to check all of their state’s auto insurance requirements, but they may decide to purchase additional protections as well.
Drivers planning to take out a car loan should check with the lender to find out what additional coverage is required to purchase it to secure the loan.
Determine how much car insurance you need
It is often best to purchase more than the minimum state auto insurance whenever possible. Car accidents can become very expensive, especially when someone is injured. Having higher policy limits reduces the risk of the driver having to pay a lot of damage out of pocket.
Compare car insurance rates and providers
Once drivers have a clear idea of the type of coverage and policy limits they want, they can start comparing quotes from the best car insurance companies. It is best to get some quotes and evaluate each company’s rates, coverage options, and customer service before purchasing an insurance policy.
How to add a used car to your existing insurance policy
Drivers who already have car insurance can add another vehicle to their policy by contacting their insurance company. Larger companies may enable the driver to add vehicle details through their online account while others may require the driver to contact the company and speak to a representative.
In order to add a new vehicle, the driver will need to know the make and model of the vehicle as well as the Vehicle Identification Number (VIN). The insurance company may also ask how many miles the car has.
Car insurance grace period
Drivers who already have insurance usually have a grace period where the insurance company covers the new car even if the driver hasn’t added it to the policy yet. Grace periods are usually around 30 days, although some can be shorter. Always check with the insurance company to check the grace period before buying a new car, and make sure the car is added to the policy before it expires.
How is used car insurance different from new car insurance?
Used car insurance is very similar to new car insurance. Both provide the same basic vehicle protection. However, there may be certain optional coverages that are not available for used cars.
For example, replacing a new car is an optional support that many insurance companies offer to drivers of new vehicles. Essentially, the covered vehicle is replaced with a completely new version if it was collected during the first or second year of ownership. But those who buy used cars will not have the option to add this to their policies.
However, in general, drivers have the same coverage options whether they insure a new or used vehicle and whether they are buying a vehicle from a dealership or a private seller.
How much does used car insurance cost?
There is a wide variation in auto insurance costs by state. Some states have higher average car insurance premiums because they see more natural disasters or have a large number of uninsured drivers. Areas prone to vehicle theft also tend to have higher rates.
The car itself also has a huge impact on the price. In general, used cars are cheaper to insure than new cars because the cost of the car and its parts has gone down. This makes it cheaper to repair. But assuming that a used car will automatically be cheaper to insure is a classic used car mistake. The only way to be sure of the cost of insuring a used car is to get quotes from several insurance companies.
How long does it take to get used car insurance?
Drivers can get car insurance coverage for a used car in less than a few minutes if they already have a car insurance policy. All they have to do is call their insurance company and let them know about the purchase.
For drivers who do not already have car insurance, it may take a little longer. They will need to take the time to compare quotes from several providers before choosing one. But drivers can do this in the afternoon in most cases.
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