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Can I drive a car off the lot without insurance?

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Things to remember...

All you need to test drive a car is your driver’s license.

If you want to get behind the wheel of your dream car, you can walk onto any dealer lot, browse the inventory, speak with a car salesman, and hand over your license so that you can see how the car you like the most really handles on the road.

If you fall in love with the car that you test out and the salesman promises to get you a good deal, you could find yourself sitting in the finance office negotiating a deal.

After you get a great deal on an interest rate and you negotiate down the sales price of the car, you’re officially the owner of a brand new car.

Compare car insurance quotes side-by-side to get the best coverage at the best price.

Here’s what you need to know about insurance requirements before you drive off of the lot:

Find Out If Insurance Is Required in Your State


When you sit down to take the driver’s licensing exam, the state will test you to see if you’re familiar with all of the laws that pertain to driving and owning a car.

One of the sections of the code that you need to brush up on once you own a car is the section that explains whether or not insurance is mandatory.

While there are always exceptions to the rule, insurance is mandatory in most states. The amount of coverage that you need to carry to drive a car that you own depends on where you’re living and where the car is going to be registered.

Typically, the following auto insurance coverage options are required at a minimum:

Is state minimum coverage enough?

State minimum coverage limits may be enough. If you pay for your vehicle outright without securing any type of financing, you don’t need anything more than the coverage options and limits that the state requires to legally drive off of the lot.

Just because the mandatory coverage limits will satisfy the state vehicle code doesn’t mean that you’re protected if you elect to buy a basic policy.

If you want to protect your assets and your future income, you still need to consider buying more than just the low third-party limits the state says that you need. Compare different limits and premiums so that you can decide what you need and what you can afford to buy.

Compare different limits and premiums so that you can decide what you need and what you can afford to buy.

Will the dealer ask to see your coverage if you pay cash for the car?

Having third-party coverage and possibly no-fault coverage is required in the state, but you might assume that it’s the DMV’s responsibility to ask for proof and not the dealer’s. This is where your assumptions could lead to serious issues with the dealer and with the DMV.

In most states, the dealer will fill out the application to transfer ownership to the buyer. This means that the bill of sale will be submitted to the motor vehicle agency along with the application for tags in the buyer’s name.

One of the benefits of buying a car from a dealership is that they handle the DMV paperwork for you.

As an authorized party that is able to process DMV paperwork, the dealer is obligated to collect certain paperwork to complete the application. Most of the time, the motor vehicle agency wants to see that you have insurance before the tags will be issued.

When the proof needs to accompany the application, the  dealer must see the proof before they will give you their keys.

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What kind of coverage do you need when you’re financing the car?

If you’re financing the car instead of buying it outright, the requirements are even more strict. Auto loan lenders will let you borrow money to pay for a car as long as the car is well-maintained.

You are given the money in a lump sum in exchange for monthly payments that include principal and interest. The car will be security on your loan if you decide not to pay.

Since the vehicle is used as collateral on your car loan, the finance company will verify that you have the right insurance on your car.

You can’t just carry liability insurance and drive off without any issues. Instead, you need to have full coverage insurance that will pay for physical damage coverage that will help you pay to repair the car after a loss.

If you already have a loan in place, the dealer might not have to get the actual insurance documents from you. When you secure a loan in the finance office, there’s a good chance that you’ll be asked for the documented proof in the office.

No matter what’s required, you will have to sign a document saying that you have full coverage.

Can you choose any deductible when you’re financing your car?

If you’re building a policy right before you leave the dealer, choose the right coverage from the start. It’s only reasonable to try and keep premiums low by selecting a high deductible.

Unfortunately, if you do that, you might not be in compliance with the terms set by the lender for the auto loan.

Lenders want to know that you can afford to pay your car note, maintain the vehicle, have it serviced, and fix repairs when the car is damaged.

Having insurance helps you fix the serious repairs, but if your deductible is too high, you might not be able to file a claim. This is why most companies only accept physical damage deductibles of $500 or less.

Will your existing car insurance be enough to satisfy the dealer?

If you already own a car, you don’t have to worry about going out and shopping for a new policy right away. You will have some automatic coverage that will satisfy your lender’s requirements and your state’s requirements for a short period of time.

The extension won’t last forever, but it’s enough to give you time to shop around after you leave the lot.

In most cases, your automatic coverage will last for 14 to 30 days on the new car after the new car is purchased. This is if it’s an additional car rather than a replacement vehicle.

If it’s a replacement vehicle, the coverage extends to the rest of the insurance term. When you only have liability, you will have full coverage for only four days. You will have deductibles of $500 for both comprehensive and collision for the four-day period.

What happens if you don’t have insurance when the sale is official?


If you don’t own a car or you don’t have insurance in your own name, you need to get insurance while you’re still in the finance office. The dealer will ask to see proof of insurance before you can leave with your keys in hand.

When you don’t have the coverage, you may not get to leave with the car until you get on the phone and purchase a policy.

You can buy auto insurance quickly if you use the world wide web. One of the fastest ways to get insurance when you’re in a pinch is to use an online rate comparison tool.

You can enter your personal information into the tool, provide the VIN, and select the coverage options that you want.

Get your instant quotes today, select the right auto insurance company, and don’t take the risk of driving off of the lot without insurance.

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