California 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.
QUICK LOOK
- 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.
California’s state minimum requirements include the following types of liability coverage:
- Bodily injury liability coverage: $15,000 per person and $30,000 per accident
- Property damage liability coverage: $5,000 per accident
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 deductible, or enhance your coverage by switching companies.
Comparison shopping with Jerry 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.
FAQ
- Can you drive a new car home without insurance?
- What are the penalties for driving without car insurance?
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Licensed Insurance Agent
R.E. Fulton is an expert insurance writer specializing in car ownership topics from car shopping and loan advice to insurance and repair guides. R.E.’s mission is to create unique and accessible content that helps readers to become more successful and independent car owners. R.E. has written and edited over 900 high-performing articles for Jerry, with an average of 1 million+ views. As a senior writer on Jerry’s editorial team, R.E. draws on over 10 years of experience as a professional writer and digital publishing specialist. Prior to joining Jerry’s editorial team in 2021, R.E. worked as a writing coach at Columbia University, the Rochester Institute of Technology (RIT), and the University of Rochester. They serve as a managing editor for peer-reviewed history publication Nursing Clio, where their work has appeared regularly since 2015.
Kathleen Flear is an expert insurance writer and editor who previously lead up Jerry’s editorial team as director of content. Kathleen empowers drivers to make smart car ownership decisions through best-in-class articles on insurance, loans, and maintenance. Prior to joining Jerry in 2021, Kathleen served as managing editor for a team of SEO content marketing professionals at Article-Writing.co and worked as a freelance writer and editor for a range of digital publications, including Chicago Literati magazine and Golden Words. She earned a bachelor’s degree in English language and literature from Queen’s University, and a master’s degree in creative writing and fiction from Sierra Nevada University.
