Used car insurance costs & requirements

Auto insurance is required by law in almost every state, and whether a driver is buying from a dealership or a private seller, they need used vehicle insurance before they can legally drive the car off the lot. 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 pretty much the same as new car insurance. Almost all states require drivers to have liability insurance. This covers damage if the policyholder injures another person or damages property while driving.

Many car insurance policies also include coverage for the vehicle itself. Although not required by law, lenders typically do not approve a car loan unless the driver has collision and collision damage waiver insurance on the vehicle. That way, if the car is totaled, the lender can still recover the value of the car.

Purchase from a used car dealer

Used car dealers require all drivers to show proof of insurance before they are allowed to drive vehicles out of the lot. For those who don’t already have insurance, it’s important to get a policy in advance so they don’t run into hiccups.

Purchase from a private seller

Private sellers may not be as strict about proof of insurance before allowing someone to test drive or buy their vehicle. But that doesn’t change the law. Motorists still need at least the state minimum liability insurance in order to be able to drive legally.

How to get insurance before buying a used car

Here are the main steps a driver needs to take to get insurance before buying a used car:

Decide what type of policy is best

First, the driver needs to think about what type of coverage they are looking for. They must check off all of their state’s auto insurance requirements, but they can also choose to purchase additional coverage.

Drivers wishing to take out an auto loan should check with their lender to determine what additional coverage they need to purchase to secure the loan.

Decide how much car insurance you need

It’s often best to get more than the state minimum auto insurance whenever possible. Car accidents can be expensive, especially if someone is injured. Higher policy limits reduce the risk that the driver will have to pay for a large part of the 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 offers from the leading auto insurance companies. It’s best to get a few quotes and evaluate each company’s pricing, coverage options, and customer service before purchasing a policy.

How to add a used car to your existing insurance

Drivers who already have car insurance can add another vehicle to their policy by contacting their insurer. Larger companies may allow the driver to add the vehicle details through their online account, while others require the driver to call the company and speak to a representative.

In order to add a new vehicle, the driver needs to know the make and model of the vehicle and its vehicle identification number (VIN). The insurer may also ask for the number of kilometers driven by the vehicle.

Grace period for car insurance

Drivers who already have insurance usually have a grace period during which the insurance company will cover the new vehicle, even if the driver has not yet added it to the policy. Grace periods are typically around 30 days, although some may be shorter. Always check with the insurer about the grace period before purchasing a new vehicle and make sure you add the vehicle 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 offer the same essential protection for a car. However, there may be certain optional coverages that are not available for used vehicles.

For example, new vehicle replacement is an optional support that many insurers offer to new vehicle drivers. Essentially, it pays to replace a covered vehicle with a brand new version if it’s totaled within the first year or two of ownership. But those who buy used cars don’t have the option to add this to their policies.

Overall, however, motorists have the same coverage options whether they are insuring a new car or a used car, and whether they are buying a car from a dealer or a private seller.

How much does used car insurance cost?

Car insurance costs vary greatly by state. Certain states have higher average auto insurance premiums because they see more natural disasters or have large numbers of uninsured drivers. Areas prone to vehicle theft also tend to have higher rates.

The vehicle itself also has a significant impact on the price. In general, used cars are cheaper to insure than new cars because the cost of the vehicle and its parts is written off. This makes them cheaper to repair. But automatically assuming that a used car is cheaper to insure is a classic used car mistake. The only way to know for sure how much it will cost to insure a used car is to get quotes from multiple insurers.

How long does used car insurance last?

Motorists can get car insurance for a used car in just a few minutes if they already have car insurance. All they have to do is contact their insurer and inform them of the purchase.

For drivers who do not already have car insurance, it may take a little longer. You need to set aside some time to compare offers from multiple providers before settling on one. But drivers can do this in an afternoon in most cases.

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