Do dealerships verify insurance?
- Insurance for used cars
- Liability insurance
- Financed cars and full coverage
- How to buy
- Getting insurance on a new car
- Temporary insurance
- Driving without insurance
- Dealership verification
Yes, dealerships verify insurance. For new and used, leased or financed vehicles, you will need to provide proof of insurance to the dealership. The policy will also need to meet the minimum coverage requirements in your state.
You might be able to use your existing policy for a temporary grace period (usually around 30 days) to drive off the lot and then research other options.
That’s why comparison and broker app Jerry has compiled everything you need to know about the dealership car insurance verification process.
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Do dealerships verify insurance?
If you buy from a dealer, they are responsible for processing the paperwork for the DMV. So, you must provide proof of insurance to the dealership before you can receive the keys to your new ride.
Some dealers will ask to see the actual documentation. Others will simply ask you to sign a legally binding document declaring that you have the required coverage.
Either way, you can expect the dealership to verify your insurance before you can drive off the lot.
Do I need auto insurance to buy a used car?
Yes. Each state has a minimum coverage level. Your insurance policy must meet these requirements before you can legally drive the vehicle, whether new or used.
Depending on your state and the type of financing, your policy may need to include collision, comprehensive, and liability coverage.
Leased and financed vehicles have additional coverage requirements. Make sure you choose a policy that meets your state’s requirements as well as the dealership’s. It may be possible to use your existing policy temporarily.
Key Takeaway Even if the seller or dealership doesn’t verify your auto insurance, you still need to have it.
Do I need more than liability insurance?
Possibly. In most states, you only need property damage liability and bodily injury coverage. However, some states require personal injury and uninsured motorist coverage, too.
You will definitely need more than liability insurance if you are financing a vehicle. This is usually included in your contract, so you’ll need to be able to show that your policy includes collision and comprehensive coverage.
That being said, minimum insurance may cost less upfront, but it can quickly become far more expensive than full coverage if you’re in an at-fault accident.
Why do financed cars require full coverage?
If you finance a vehicle, the lender is still technically the legal owner until you pay off the loan. As long as you’re still making payments, the lender gets to choose the level of coverage you need.
You should plan to maintain full coverage until you’ve paid the loan off completely. This will protect the legal owner if the vehicle is damaged while you are behind the wheel.
Once you pay off the car, you can consider options that work better for you.
How to buy affordable same day insurance
If you are buying a car and you need insurance that day, don’t get frazzled and overpay! Jerry is an insurance comparison app that is fast, free, and could potentially save you hundreds.
Here’s what people are paying with Jerry.
| Allstate | $120 | $1440 |
| Kemper | $88 | $1065 |
| National General | $100 | $1208 |
| Nationwide | $112 | $1351 |
| Progressive | $104 | $1254 |
| Safeco | $124 | $1498 |
| State Auto | $64 | $768 |
| Travelers | $102 | $1233 |
How do you get insurance on a new car if you don’t already have a policy?
It’s easy to go online and buy a car insurance policy.
A few key data points will affect your auto insurance rate, like your age, credit score, and driving history. By providing these details about yourself and your vehicle, you can quickly get quotes from multiple companies and compare rates.
Jerry is not only the easiest but the most effective way to find a car insurance policy that is customized for you. Consider trying Jerry before you start car shopping and you’ll get a sneaky peek at which models might cost the most (or least!) to insure.
After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to. So why do all that extra work when Jerry can do it better?
What is temporary auto insurance?
Temporary auto insurance is not commonly available in the United States except in unusual circumstances.
Most insurance providers will only write policies between six months and one year.
Instead, temporary auto insurance usually refers to a situation like a car rental, where drivers may be offered a short-term policy through the rental company.
For instance, when you borrow a friend’s car, you would typically be covered under their policy. This policy type is not an option for insuring a new vehicle until you can obtain permanent coverage.
There are also non-owner policies if you frequently borrow or drive but do not own a vehicle.
Some dealerships offer a product called "gap insurance" to cover you for your first month if you don’t already have insurance. But this can be costly and time-consuming. More on that below.
Why you should never get temporary insurance from a dealer
If you don’t have the correct coverage in place when you buy a car, the dealership may offer to write you a temporary "gap insurance" policy in-house.
While this may seem convenient, it’s actually the worst coverage you can get for the most expensive price.
The temporary insurance from your dealership is legitimate, but it’s not worth your money. While it may serve its purpose, temporary car insurance from your dealership is often overpriced and provides a lower value.
Can I drive a car I just bought without insurance?
No—but there’s a bit of a loophole. There is something called an insurance grace period and it could last between 14 and 30 days.
If you already have existing insurance, there may be a clause in your policy relating to newly acquired vehicles. This coverage could extend to cover your new vehicle for a limited time until you can officially add the vehicle to your policy.
Call up your insurance company agent to confirm how long you have to add the new vehicle. If you are replacing the vehicle on your policy with a new one, your coverage could even extend to the final date of the current term.
If you do not already have a policy, it is illegal to drive without coverage (except in New Hampshire). This is true even if you’re just driving home from the dealer.
Buying from a private seller means that you probably won’t have to show them proof of insurance. However, you still need to have car insurance if you will be driving.
So, will the dealership check my insurance before selling me a car?
The bottom line? Yes. You need to be covered before you drive off the lot with a new or used vehicle, and the dealership is obligated to verify your insurance.
However, it’s important to allow yourself to research insurance and compare quotes. A casual search online will not bring up the best rates.
If you’d rather leave the hard work of gathering quotes to someone else, try Jerry.
This free app compares rates from up to 45 companies in seconds—no need to sit across from a broker or negotiate over the phone. With Jerry, you could be behind the wheel with a new policy in no time.
"Worth it! I just financed a new car and knew my insurance premium was going to go up. Jerry worked with me to find the lowest premium and they were able to change my old insurance policy instantly." - Satisfied Jerry User
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