If you’ve ever purchased a vehicle, you know how acquiring auto insurance — though a vital part of the process — can take time while buying your car.
However, buying the first insurance quote you receive may not get you the best rates. Since, in many states, you need proof of insurance before leaving the lot, it only makes sense to do your homework prior to purchase and get quotes from several auto insurance carriers in advance.
While getting car insurance prior to purchase might be challenging, it’s not impossible.
WHY SHOULD YOU ACQUIRE AUTO INSURANCE EARLY?
Securing your car insurance prior to purchasing your vehicle may seem unnecessary, but consider a few reasons to do it early:
- Auto dealerships often require proof of insurance.
- Banks and financial institutions often require proof of insurance.
- It’s (almost always) illegal to drive without insurance. Let’s dive into each of these points further.
Do Dealerships & Banks Require Insurance?
In most instances, you’ll need car insurance prior to driving your new vehicle off the lot (or away from the previous owner). While dealerships may require proof of insurance, private sellers may not. If you plan on financing the vehicle, the bank or financial institution may also require proof of insurance before you purchase the car. Since both dealerships and financing offices often require insurance, it only benefits you to have car insurance purchased prior to buying the vehicle.
Do You Need Insurance To Drive A Car?
You’ll need car insurance the moment you drive your vehicle away for the first time. If you have an existing auto insurance policy for a different car, your current coverage may extend for a short period of time while you update your policy to reflect the newly purchased car. However, your existing policy may not extend vital coverage the new vehicle may require, so waiting to update your insurance is not advisable. You should call your agent or insurance company directly to add or replace a vehicle before taking possession.
CAN YOU BUY CAR INSURANCE PRIOR TO PURCHASING A CAR?
Yes, you can purchase auto insurance prior to making your car purchase.
In some situations, the insurance carrier will allow you to buy a policy prior to having the vehicle’s VIN number, but most companies require that you have the VIN (or know the exact car you plan to purchase).
BENEFITS OF BUYING CAR INSURANCE BEFORE THE CAR
When you’re sitting at the dealership and signing all the paperwork to purchase your vehicle, there’s a lot going on. Buying your car insurance during this time may feel stressful and overwhelming, to say the least.
Here are the benefits of buying car insurance prior to buying your vehicle:
- Budget: If you wait to purchase your insurance while you’re sitting at the car dealership ready to sign on the dotted line, you may have no concept of how much it’s going to cost you. By purchasing insurance in advance, you can better budget for your car insurance premium for the year.
- Secure the best rate: With some extra time prior to purchasing your vehicle, you’ll be able to shop around for the best car insurance rates. Call and get quotes from multiple carriers or brokers to identify the best possible rates. It will be helpful to have an idea of the make, model, and year for the car you hope to buy.
- Start the setup: If you don’t yet know the exact vehicle you want to buy (or you don’t have the VIN number), your insurance broker or agent can still begin the process in advance. Then, once you know the exact vehicle, the process will be far quicker to complete.
- Understand coverage: There are a lot of options when it comes to your auto insurance. From required coverage, like liability and collision, to add-on options, like roadside assistance and rental reimbursement, there are a lot of choices with insurance. Buying a policy early will give you time to have the conversations necessary to understand what you’ll need.
HOW TO BUY CAR INSURANCE PRIOR TO BUYING A CAR
Now that you know why purchasing insurance prior to buying your vehicle can be so valuable, it’s time to move forward if you’re ready to buy a car. Here’s what you’ll need to do to secure auto insurance without a vehicle:
1. Shop around.
If you don’t have a policy: You can still shop around for potential insurance coverage. Get quotes from multiple insurance carriers for the best prices. During the quote process, you’ll need personal information for yourself handy, as well as that of any other potential drivers of the vehicle.
2. Confirm your intent.
If you already know what car you want to purchase, having a written or verbal agreement with the dealer or seller can help solidify details for your insurance carrier. Again, it’s not always necessary to know the exact vehicle you intend to purchase but having the new vehicle identification number will allow you to get the precise insurance premium.
3. Submit the vehicle information.
Once you have the vehicle information (whether that’s before the actual purchase or during the paperwork signing process), make sure your insurance carrier has everything they need. That will often include the year, make, model, VIN, current mileage, and any vehicle history.
4. Pay for your policy.
Once your policy has been underwritten, you’ll be able to complete the process by paying the premium — whether that’s for a month, six months or annually.
And that’s all there is to it! Purchasing car insurance before you purchase a vehicle could save you time, energy, and money. So if you’re considering a new car purchase, consider getting insurance well in advance.
If you need help finding the best car insurance coverage for the best price, start by speaking to a SimplyIOA agent at 833.872.4467 or get an auto insurance quote online now.
