How to Get Car Insurance Before Buying a Car

Use the make and model of your new vehicle to shop around for car insurance quotes before buying a car, then use the VIN to finalize your coverage and rate.
Written by Jessica Barrett
Edited by Georgina Grant
If you’re ready to buy a new car, you’ll need to get a
car insurance
policy before you drive off the lot. Use the vehicle make and model to shop around for
car insurance quotes
—and once you’ve settled on a specific vehicle, use the VIN to finalize your new policy.
  • All car dealerships require proof of an active car insurance policy before you can finalize your vehicle purchase. 
  • You can shop around to compare 3-5 insurance quotes before buying a car, but you’ll need the unique VIN of the car you’re purchasing to secure insurance coverage.
  • If you’re financing the vehicle, you will need to purchase full-coverage insurance to satisfy lender requirements.
  • Once you’ve purchased a policy, print your insurance card or bring digital proof of insurance to the dealership.

You need an active car insurance policy to take your new car home

If you don’t have a policy for an existing or prior vehicle, you’ll need to get insurance coverage in place before you sign on the dotted line—otherwise, you won’t be allowed to drive your new ride home.
Car dealerships require proof of insurance
to finalize a new or used car purchase. If you’re financing your car, your lender will require you to purchase
full-coverage insurance

How to get car insurance when you’re buying a car

Getting the coverage you need as a first-time car owner is fairly straightforward. It’s also quick! Most insurance companies will give you
same-day coverage
that activates once you pay. 
Expert Tip When you shop for quotes, confirm with an agent whether or not the coverage is immediate. Remember, you can’t drive your new car home without active coverage. 

Step 1: Shop around to compare car insurance quotes

Auto insurance companies use different calculations to set your rate, so each provider may offer you different
car insurance discounts
and types of insurance. Get quotes from at least 3–5 different companies to compare your options and find the best rates.
What you should expect to pay: Auto insurance rates for a new car with comprehensive and collision insurance are about $1,712 per year on average. For used vehicles, the average rate is typically a little lower. 
Various rating factors will impact the insurance costs you get from different providers. While rules vary between states and companies, these are the most common factors: 
Expert Tip Most dealerships list their VINs online. Using a VIN for the same year, make, and model as the cars you plan to test drive will get you a closer quote when you’re shopping for coverage.

Step 2: Confirm the insurance coverage you need

Every driver’s needs are a little different. To narrow down what
type of car insurance coverage
is right for you (and the amount of coverage you need), consider the following:
  • Your state insurance laws: Your insurance agent will advise how much
    bodily injury liability coverage
    property damage liability insurance
    you need—and let you know if your state requires other types of coverage, like uninsured/underinsured motorist coverage, personal injury protection (PIP), and/or medical payments (MedPay). Drivers in New Hampshire aren’t required to purchase car insurance.
  • Your car loan agreement: Lenders will require you to purchase
    collision coverage
    comprehensive coverage
    until your auto loan is paid in full. These both require deductibles before the insurance kicks in.
  • The actual cash value (ACV) of your car: If you’re buying
    a used car
    with high mileage and
    a low ACV
    , it may not make sense to spend a lot on full coverage—but for brand-new vehicles, it’s typically a good idea. Consider adding
    gap insurance
    new car replacement insurance
    if your provider offers it.

Step 3: Gather information for all drivers on the policy

For each driver on your insurance policy, you’ll need to provide the following information:
  • Name
  • Birth date
  • Social Security number
  • Driver’s license number
  • Driving history

Step 4: Choose your insurance provider

Based on the quotes you got, customer reviews, and financial ratings,
choose the best car insurance company
that fits your needs. 
  • Large companies like
    State Farm
    offer low rates and a history of financial strength
  • Regional insurance companies are also great picks for affordable car insurance coverage options
  • Many companies also offer additional insurance products and
    bundling discounts
Insurance Company
Average annual full coverage car insurance rate
American Family
State Farm
Shop around and get rates from at least three different insurers to make sure you’re getting the best rate for the coverage that meets your
state insurance requirements
, the AllCar™ app, can help you compare rates for free without any hassles or paperwork.

Step 5: Get the VIN of the vehicle you’re buying

You won’t be able to purchase an auto insurance policy until you have the
vehicle identification number (VIN)
of the specific car you plan to buy.
If your car insurance company gave you a quote based on your personal information and the make and model of the car, expect your insurance premium to change a bit once you update the VIN.
Expert Tip If you’re financing your vehicle, most insurance companies allow lienholder information to be updated through their app. You can have the binder letter emailed directly to you or the dealer with no wait time at all.

Step 6: Finalize your policy with your insurer

Make sure that your policy is set to start before you take possession of the car. The last thing you want is to be uninsured when you’re ready to drive off with your new ride! 
Your new insurance company will issue an insurance card that you can use as
proof of insurance
at the dealership when you buy your car. 
You’ll also need to keep a copy of your proof of insurance in the car at all times—which is easier now that it’s
legal to show proof of car insurance on your phone
in almost every state. 
Expert Tip Once you buy the policy, print your ID cards at home or bring the digital copy with you to pick up the car. You’ll spend less time at the dealership waiting for a fax!
was a great experience. It was my first time buying insurance, and they took their time explaining a lot of insurance terms for me. Shopping around for quotes was super easy!” —Dakota F.
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It’s illegal to drive a car without insurance—even a new car. If you buy a car from a dealership, you usually need to have your insurance policy in place before you sign the paperwork. If you buy from a private seller, this may not be the case. 
If you have an existing policy for another vehicle, most car insurance companies require you to report a new car purchase within 7 to 30 days. You can call your insurer to add the new vehicle. 
Legally, there is no grace period for insurance. If you are in an accident or at a traffic stop before adding the car to your insurance policy, you can get a ticket for driving an uninsured vehicle.
While dealerships typically check your insurance before you buy, a private party might not. But you’ll still need insurance to legally drive any car you buy—no matter where you got it.
No. Even if you live next door to the dealership, making the one-block drive without proper auto insurance coverage is illegal—unless you live in a state that permits car owners to drive without insurance.
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