Handling car insurance can be confusing. When buying your car second-hand, it can raise even more questions. And the wrong answer can land you in trouble.
Do I need used car insurance? The simple answer? Yes.
Sure, you can buy a used car without insurance, but you can’t drive it without insurance coverage. The second you turn the engine on ready to drive your vehicle home, you need to be able to prove you have valid auto insurance. Specifically, you need a policy that meets your state’s minimum amount of liability insurance.
Expert Tip: keep in mind that these minimum requirements are set by the state. You may want to add additional coverage to protect yourself over and above the state minimums, so doing a little research into your options is always a good idea.
Types of Insurance Coverage
Liability
Liability auto insurance on a used car is the least expensive form you can buy, and it covers you strictly for injury and damage to others for which you were responsible. These policies are usually the bare minimum coverage that puts you over the state’s legal requirement.
Collision
Collision insurance is exactly what the name suggests. It covers you in the event of a collision with another vehicle and even single-vehicle crashes, such as an incident caused by difficult road conditions.
This coverage is suitable for drivers who want the safety net of lower repair costs in the event of a collision. It also covers damage that occurs during a hit and run and, in some cases, covers drivers that use a rental car.
Most collision insurance policies require the policyholder to pay a deductible; a payment you must make before the insurer covers additional damage.
Comprehensive
Comprehensive insurance covers pretty much everything, from an “act of god” to vandalism and theft. As such, comprehensive insurance is much more expensive than other types of insurance and the deductibles can be higher. This can sometimes mean that if your used car only suffers minor damage, it may be less expensive to bypass your insurer and just cover the cost yourself.
Those looking to lease or loan a used car may be required to have both collision and comprehensive insurance. However, the older the car, the less beneficial and financially sound comprehensive insurance may be.
Insurance Grace Period
“I already have insurance, how does insurance work when buying a used car?” The Answer: while you must have insurance to be able to drive the car, there is usually a grace period for already insured drivers where their previous coverage will apply.
How long is the insurance grace period when you buy a car?
The grace period varies by state, but typically falls somewhere in between 7 and 30 days but. Either way, it’s best to contact your insurance provider as soon as you buy a car, so they can update your policy.
Communicating With Your Insurance Agent
If you already have a policy, the process of updating them with your new vehicle’s details is relatively easy. You just need to give them some information about your car.
Information Insurance Agents Need About Your Vehicle
- Make, model and year
- Vehicle Identification Number (VIN)
- Safety features, such as passive restraint systems or anti-lock brakes
- Anti-theft devices, such as GPS trackers
- Roughly how many miles it will be driven annually
If this will be your first car, you’ll be required to give more details to set up your account including personal information and how you will pay for your coverage. It’s important to remember that if you do not already have insurance, you need to activate a policy and have proof of coverage before driving your new car.
For those looking to get insurance for the first time, Motobyo recommends you shop around for the best possible deal before you choose who to go with. Each provider will offer a different level of service, different pricing models, and different types of coverage. By getting quotes from a range of providers, you can make sure you’re getting the best possible bang for your buck.
Motobyo Offers a Better Experience for Used Car Buyers
Buying a used car can be stressful. There’s a lot you need to know to avoid problems. At Motobyo, we wanted to make the used car buying experience better, including everything that goes into buying a car like service and repair, title and registration, and more!
We offer a true private party marketplace that connects private car sellers directly to car buyers, eliminating the middlemen and allowing both parties to complete a transaction in the most secure, transparent manner available today. We also provide certified inspections to protect our buyers! If you’re ready to get the perfect car for you and your needs, you’re in the right place!
