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How to Sell a Car Without Insurance

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Here's what you need to know...
  • If you own a vehicle that’s designed to be operated on public roads, it’s your legal obligation to purchase insurance for as long as the car is registered in your name
  • If insurance is mandatory in your state and you don’t have what’s required by law, you could face monetary and criminal penalties for driving without insurance
  • If someone else is operating your uninsured vehicle, you are still responsible for the damages that happen if the driver causes a car accident, and someone else suffers damages or injuries
  • If you want to sell a car that doesn’t have insurance, make sure that you’ve already turned in your plates so that you aren’t fined, and your driving privilege is not suspended
  • If you sell the vehicle to a private party, be clear that the car isn’t insured and don’t allow the driver to test drive the vehicle


Selling a car can be a time-consuming process. Not only do you need to settle on a fair price that will spark interest in serious car buyers, but you also need to make the time to meet with these prospective buyers so that they can inspect the car.

It can pose a serious problem if the car that you’re selling doesn’t have insurance.

Driving a car without insurance can be risky, but it’s also risky to sell a car to someone else when the car doesn’t have live coverage.

While it’s not recommended, there are a few ways that you can go about selling a car without buying insurance on it first.

Here’s what you need to know before you set up appointments or start negotiations.

Start comparison shopping today to make sure you get the right coverage. Enter your zip code into our FREE comparison tool to get started!

Auto Insurance is Required in the Most States

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Most states have mandatory auto insurance laws. If you live in a state where insurance is compulsory, simply allowing your insurance to cancel is against the law.

Before you forgo buying insurance on a car that you plan on selling in the future, you should learn about the direct and indirect consequences of owning an uninsured vehicle.

As long as the vehicle you are selling is registered in a state with mandatory laws, you’re required to carry insurance.

It’s not the drivers obligation to purchase a minimum amount of insurance, but the registered owner’s responsibility.

You can’t rely on a prospective buyer to purchase insurance on a car they’re interested in before they take over ownership.

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What are the dangers of selling a car without auto insurance?

You might think that you can save time and money selling your car without buying a basic policy, but there are pitfalls. You need to know the drawbacks before you affect your ability to sell your car quickly.

Not only might you face some serious fines, but you can also have an uninsured loss that will land you in court.

Here are the dangers:

  • Suspension of your registration can affect the buyer’s ability to transfer the registration in their name without paying extra fees
  • Vehicle impounded if your uninsured car is parked on public property with required fees and insurance before release
  • Citations for driving uninsured if you’re taking the vehicle to be serviced before someone comes to view it
  • An uninsured loss while the prospective buyer is test driving the car
  • Suspension of your driving privilege, which can also pose problems when you buy another vehicle
  • High-risk insurance rates in the future when you buy coverage for a new car

Can you sell a car on the private market when it’s not insured?

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If you’re willing to put a little effort into selling your car, you can get the most money when you sell your car on the private market.

When you are selling your car to a private party, it’s important to screen callers thoroughly and protect yourself as a seller by being as upfront as possible.

It’s possible to legally sell your car without insurance on it if you’ve already turned in your plates.

If you still have license plates and an active registration, it’s illegal to sell the car without coverage because you aren’t complying with state law.

Don’t Allow Buyers to Test Drive an Uninsured Car

If you don’t have plates or insurance, make this clear in your listing. It’s best to have proof that you disclosed this to the buyer in writing so that you can protect your interests if the party gets into an accident after you make a transaction.

No matter how upfront you are, you shouldn’t allow the buyer to test drive the car or drive away from your property without first showing that they have their own insurance.

If the buyer has existing coverage, the liability coverage will automatically follow them while they test drive your car, but their coverage still won’t protect you as the seller if an injured party tries to sue you.

Trade Your Vehicle In or Sell it to a Commercial Car Buyer

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If you don’t want to risk anything by selling an uninsured car to a private party, you do have the option to sell the car to a dealer or a professional car buyer.

If you trade the car in, be sure to have it towed to the dealer, or you won’t have protection when you drive it there.

One of the benefits of selling a car to a professional buyer is that they give you cash and tow the car away for you.

After the transaction is complete, make sure to keep the bill of sale documents so that you can show you no longer own the vehicle if lawsuits arise later on.

If you don’t have insurance and you’re planning on buying a new car, it’s time to price how much insurance will cost you. You can get quotes on different makes and models to see which cars have the best rates.

If you want to compare the premiums from carrier to carrier, use our FREE online comparison tool by entering your zip code!

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