New car purchases: Obtaining insurance coverage on a weekend
The insurance office may be closed, but don’t let that stop you from finding your new car this weekend
-You CAN buy a car on the weekend and drive away with it before Monday.
-Your best protection is to speak with your insurance company prior to purchasing the car so they can advise you of their specific requirements for coverage.
Car purchase requirements
When you purchase a car, whether brand-new or used, you will need insurance coverage in order to be able to finalize the agreement and to drive away with your purchase. What type of insurance coverage you need will depend on the state you reside or intend to register the car in, where you are buying the car from, and whether or not the purchase is affected by the use of a loan or other type of financing.
If the car required financing, the dealer will require proof of valid insurance prior to releasing the vehicle to you. This is without exception, whether the car is being financed by them or someone else. If the car does not require financing, the seller may not require proof of insurance, but they generally do in order to protect themselves from any potential liability issues. It is very rare (unless you’re in New Hampshire) that you will be able to leave the dealership without having provided proof of insurance.
Insurance coverage differs by state
Insurance requirements will differ by state, sometimes greatly. You should always confirm you have insurance prior to making arrangements. You don’t want to end up at the lot, having dropped off your car, only to find out that they won’t release the new car to you because you aren’t able to confirm sufficient automobile insurance coverage.
The simplest option that will likely cause the least amount of stress, is to contact your insurance company before you head out to the dealership or seller.
If you already have automobile insurance coverage, some states will allow you a grace period before the specific car you purchase must be covered under a policy issued for that particular vehicle. You should always check the requirements specific to your state, and also to your insurance company. Just because the state allows it doesn’t mean that the insurance company will. The insurance company is not your friend and will find any exception or loophole in order to deny claims.
New Hampshire does not require drivers to have liability insurance coverage. You are required to provide proof of the ability to cover losses. Sufficiency may be determined by the dealer.
Weekend purchase coverage options
Dealer- or seller-provided insurance
When you purchase a car from a dealer or seller, you may be covered directly under their policy. In terms of a private seller, this is much riskier and less likely to be provided, if it’s even possible. A dealer will have their own insurance coverage and, as a courtesy, may extend this to you until you can obtain your own coverage on the Monday following the purchase. Whether this is offered will depend on the state you are purchasing the car in, where you intend to take the vehicle, and the dealership itself. In a fault-based automobile insurance state, this courtesy is unlikely to be extended to you unless you are very wealthy.
While the dealership may not be willing to extend their insurance coverage to you for free so you can take your new purchase home, there are some dealerships that will for a price. Some will extend to you their dealer-specific insurance, but some will add a fee for insurance coverage to your new car purchase agreement.
The dealerships that extend this service may extend it for a short period of time or may extend it for the life of your ownership of the car. Check your purchase and loan agreements carefully and be sure you know the extent and limits of the insurance coverage provided. A nasty insurance surprise is usually tens of thousands of dollars, not a few hundred.
Old car coverage
If you are replacing your old car, presumably you already have an insurance policy. Some of these insurance policies will extend the coverage automatically to your replacement vehicle for a short period of time. Read your insurance policy binder, and contact your insurance broker or representative for detailed information.
Other coverage considerations
The simplest option that will likely cause the least amount of stress, is to contact your insurance company before you head out to the dealership or seller. Most car purchases are not finalized the same day, even if the purchase is brand new and being done in cash. When you decide that you are going to buy, contact your insurance company first and let them know.
Driving without insurance can have very real and expensive consequences.
A lot of insurance companies will issue a temporary policy and slip if you have a general idea of the car you will be buying. If it is a used car, they will require the vehicle identification number. This may be negotiable if you are buying a brand-new car. Many insurance companies have claims and other advisors available by telephone on the weekend. These advisors may not be able to issue a policy for you, but they are likely to have the authority to adjust the specific vehicle and identification number.
Driving without insurance can have very real and expensive consequences. Even if it’s a short drive, or it’s being delivered by a fltabed truck or trailer, always make sure that your investment is covered before you accept it from the dealership or seller.
A deeper dive — Related reading from the 101:
Information on how to avoid a claim denial by your insurance company.
Here’s one way it’s possible to save money on automobile insurance.