California’s New Car Insurance Grace Period

When you buy a new car in California, you’ll usually have up to 30 days to remove your previous vehicle from your insurance policy and add the new one.
Written by R.E. Fulton
Edited by Kathleen Flear
insurance companies typically offer a grace period of 2 to 30 days to add a newly purchased car to your auto insurance policy—but driving without
proof of insurance
is illegal, even if it’s just home from the dealership. 
  • California’s insurance grace period for new car purchases only applies to drivers who already have auto insurance coverage—not uninsured drivers. 
  • There’s no statewide grace period, but most insurers give you up to 30 days to update your car insurance policy. 
  • The new car insurance grace period may not cover your new vehicle in the event of a car accident. 
  • If you’re leasing or financing a vehicle, you’ll need to carry full coverage car insurance in addition to liability coverage that meets California’s car insurance requirements. 

Most insurers in California give up to 30 days to update insurance after buying a new car

When you buy a new car in California, you’ll typically have between 2 and 30 days to update your current insurance policy with your new vehicle’s information—or buy a new policy for better rates. 
What if I get in an accident during the grace period? If you’re in an accident during your insurance grace period, your current policy may cover you—but your coverage options vary based on the circumstances of the accident and the terms of your policy. Contact your insurance agent immediately if you’re in an accident during the grace period to see what coverage you have.  
What if I don’t get car insurance within the grace period? If you don’t update your insurance by the time the grace period ends, you’ll be in a coverage lapse—which can cause your insurance premiums to rise when you renew your coverage! 
Best practice: When you purchase a new car, contact your insurance company as soon as possible to ask about their grace period for new car purchases. 

The grace period only applies to currently insured drivers

If you don’t have car insurance coverage when you buy a new car, there is no grace period—you must have an active auto insurance policy in order to drive away from the dealer’s lot. 

California car insurance requirements for new vehicles

Per California state law, all vehicles require active insurance coverage and drivers who are uninsured face significant consequences. 
Collision coverage
comprehensive coverage
, and
uninsured motorist coverage
are not required by the state but may be mandated by your lender if you finance your new vehicle. 

Just because it’s the minimum, doesn’t mean it’s adequate coverage

California’s low minimum coverage limits for liability insurance meet the state’s financial responsibility requirements—but they won’t provide an adequate level of coverage for most drivers, especially with a new car. 
If you’re in an accident with minimum coverage, you could be on the hook for significant out-of-pocket expenses.

Remember to comparison shop for car insurance quotes (otherwise you could be overpaying by hundreds of dollars!)

Buying a new car is a good time to reevaluate your insurance coverage and compare car insurance rates from a range of providers to find the best policy at the best rate. 
Jerry is a licensed broker designed to help you compare your insurance options quickly and update your insurance on time to avoid a lapse in coverage. 

How do you transfer an old policy to a new car?

If you’re already a policyholder,
transferring your existing coverage to a new car
is simple, just contact your insurance provider and they will assist you with the process. Some car insurance companies even allow you to do the process online.
Keep in mind: Your insurance costs may change when transferring your policy to a new car. 
This is especially true if you adjust the types of coverage that you’ll be paying for. For example, if your new lender requires a
full-coverage policy
, and you previously only paid for minimum coverage, your auto insurance rates will definitely go up. 
However, transferring your existing policy may not be the best way to secure
cheap car insurance
. In fact, you may be able to lower your insurance premiums, lessen your
, or enhance your coverage by switching companies. 
Comparison shopping with
makes shopping for a new plan fast and easy. 

Is there a car insurance grace period for used cars?

Yes—the 30-day grace period is exactly the same for brand-new and used cars in California. 
Banks may impose their own rules on financed vehicles, but if you pay for a used car out of pocket, you’ll only have to adhere to state laws. 
saved me so much time and money! I went from $230 to $150, still with full coverage! The whole process was amazingly simple!” —Ronda S.


No. All dealerships require proof of insurance before you can drive home with a new car—and even if you’re purchasing from a private seller, driving home without insurance is a major violation of state law. 
Getting caught without car insurance in California can result in a number of penalties. California may charge you a fine ranging from $100 to well over $1,000 and impound your vehicle for driving without insurance. If you’re in an accident without insurance, the California DMV will suspend your driver’s license for one to four years. 
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