When You Need To Buy Car Insurance

Compare quotes before a new vehicle purchase, or whenever your personal information or finances change.
Written by Amy Bobinger
Edited by Sarah Gray
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Regularly shopping for
car insurance
can help you be sure you're always paying the lowest price for your policy. We recommend shopping for insurance at least every six months, but you should also compare quotes before buying a car, if you're unhappy with your provider, or if your circumstances change. 

Shop for car insurance every six months

Expert insurance agents recommend shopping for insurance each time your policy renews—typically every six months—to stay on top of competitive offers. There might be new providers in your market that can offer you a lower rate, or your current insurer might raise rates while another insurance company lowers theirs. The only way to be sure is to regularly compare quotes.

You can shop for new rates at any time

There's not a single best month to shop for car insurance, and you're not likely to get lower rates on one day of the week vs. another. Policies don’t go on sale—not even on National Car Insurance Day on February 1. And car insurance rates can fluctuate, so if you find a good deal on your premium, it's a good idea to act fast!
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Buy car insurance before buying a new or used car

You're required to show proof of financial responsibility in
all 50 states
, whether you’re driving the beater you bought from your neighbor or a brand-new beauty off the dealership lot.1 The easiest way to do this is usually to buy car insurance. And to be sure you're ready to legally drive your new car, it's best to buy
new car insurance
before you purchase a vehicle.
But there is an exception if you already have a car insurance policy. Most auto insurers will give you a short grace period after you buy a new car. During this time, your existing coverage will automatically be extended to any new vehicles that you purchase, as long as you add the new car to your policy within the specified amount of time. But be sure to verify your grace period with your insurance company
new car insurance grace periods
only last between seven and 30 days, and some companies don’t offer one at all.

How much insurance do I need when I'm buying a car?

New car, same rules—any policy you purchase must meet your state’s
minimum car insurance requirements
. Depending on where you live, this might include the following
types of coverage
:
  1. Liability insurance
    (which includes both
    bodily injury
    and
    property damage liability insurance
    ): Pays up to your coverage limits for property damage or injuries to others after an accident where you're found at fault
  2. Uninsured motorist / underinsured motorist coverage (UM/UIM)
    : Helps pay for your expenses after a collision with an uninsured driver or a driver whose insurance doesn't cover your accident-related costs
  3. Personal injury protection (PIP)
    or
    medical payments coverage (MedPay)
    : Helps cover your medical expenses after an accident, regardless of fault
If you sign a lease or loan, your lender may also require you to buy a
full coverage car insurance
policy—which adds
collision coverage
and
comprehensive coverage
to cover physical damage to your car—as well as
gap insurance
, which will cover the difference between your loan balance and the actual cash value (ACV) of your vehicle if you total it and you owe more than it's worth.

Have a policy in place before you drive home

The law requires dealerships to ask for your insurance card before letting you take your new car home. And while a private seller might not ask for proof of car insurance coverage, it doesn’t mean you can drive uninsured. If you get pulled over without an insurance card in your glovebox, showing the bill of sale won’t excuse you from a fine.2
Additionally, in most states you must provide
proof of insurance
before you can register your car and receive your license plates.

Buy car insurance if your circumstances change

Auto insurance companies use personal rating factors to
calculate your insurance premiums
; changing any one of them could cause your rates to go up or down.3
Here’s when to consider shopping for car insurance:
Category
When to shop
Personal information
  • You change your address
  • You complete your degree
  • You have a birthday
  • You marry or divorce
Driving record and claims history
  • A violation falls off your driving record after three to five years
  • You file an insurance claim
  • You get into an accident
  • You receive a traffic ticket
  • You receive a conviction for a moving violation
Household information
  • You add a driver to your auto insurance policy
  • You remove a driver from your policy
  • Your teen turns old enough to drive
Financial information
  • You buy a house
  • You buy a new car
  • You pay off a large debt
  • You retire
  • You take on new debt
Insurance needs
  • You add or drop additional coverage options
  • You change your deductible
  • You upgrade to full coverage
  • Your insurance renews in a month
Have your circumstances recently changed?
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FAQ

Do I have to buy car insurance before buying a car?

Unless you already have a policy with a new vehicle grace period, you must buy car insurance before buying a car. State insurance laws apply equally to new and used vehicles, whether you buy them at a dealership or in a private sale.

Do I need to buy car insurance for a rental?

You need to buy car insurance for a rental if you have no other source of coverage. Check your paperwork—you can get coverage from your regular car insurance policy (depending on the country) or even your credit card.

Can I drive a car without insurance if I just bought it?

No, you can’t drive a car you just purchased if you don’t have insurance. The penalties for driving uninsured—including fines, fees, jail time, and
SR-22 insurance
requirements—still apply.

At what age do you pay the most for car insurance?

Teen drivers and young drivers under the age of 25 (especially males) pay the most for car insurance. Statistically, 16 to 19-year-olds are more likely to commit risky behaviors and get involved in an at-fault car accident.

What’s the best time to buy car insurance?

The best time to buy car insurance is probably December. Auto insurance providers set their rates in January and the price of insurance keeps going up, so signing a contract in December can get you slightly cheaper rates.

Meet our experts

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Amy Bobinger
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Licensed Insurance Agent — Expert Insurance Editor
Expert insurance writer and editor Amy Bobinger specializes in car repair, car maintenance, and car insurance. Amy is passionate about creating content that helps consumers navigate challenges related to car ownership and achieve financial success in areas relating to cars.
Amy has over 10 years of writing and editing experience. After several years as a freelance writer, Amy spent four years as an editing fellow at WikiHow, where she co-authored over 600 articles on topics including car maintenance and home ownership. Since joining Jerry’s editorial team in 2022, Amy has edited over 2,500 articles on car insurance, state driving laws, and car repair and maintenance.
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Sarah Gray
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Licensed Insurance Agent — Expert Insurance Writer and Editor
Sarah Gray is an insurance writer with nearly a decade of experience in publishing and writing. Sarah specializes in writing articles that educate car owners and buyers on the full scope of car ownership—from shopping for and buying a new car to scrapping one that’s breathed its last and everything in between. Sarah has authored over 1,500 articles for Jerry on topics ranging from first-time buyer programs to how to get a salvage title for a totaled car.
Prior to joining Jerry, Sarah was a full-time professor of English literature and composition with multiple academic writing publications.

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