Do Car Dealerships Offer Temporary Insurance?

One of the most important, aside from financing details, is the right insurance. If you finance a vehicle, you're required to have full-coverage insurance before leaving the lot.
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Written by Brian Greenberg

Last updated: May 4th, 2022

When you consider purchasing a car from a dealership, there are essentials you need. One of the most important, aside from financing details, is the right insurance. If you finance a vehicle, you’re required to have full-coverage insurance before leaving the lot.

So, do car dealerships offer temporary insurance? Find out more about this form of car insurance and everything you need to know about it before making your car purchase.

How to Find Out if a Car Dealership Offers Temporary Car Insurance

To answer the question, do car dealerships offer temporary insurance? The answer is yes. Most major car dealerships usually offer temporary insurance to their customers for purchases or rentals.

Before assuming the dealership has temporary insurance available, call in advance. Don’t start the purchase process without a solid plan for acquiring the necessary insurance. You may need to find temporary insurance on your own and have your details ready to submit to the insurance provider during the purchase process.

Do Dealerships Require Proof of Insurance to Buy a Car?

Yes, if you plan to finance or lease a vehicle from a dealership, you’ll need proof of insurance to drive away if the vehicle is leased or financed. Whether you need temporary car insurance or plan to use a traditional six-month to a one-year policy, it must be secured and active.

Can You Use Your Existing Car Insurance Policy as Proof of Insurance?

Many states allow you to use your current policy to cover your new purchase. Make sure to check, however, because some may not. This is also true of insurance companies. Some may allow a grace period under your current coverage. Some may not. Knowing ahead of time will enable you to take action to prevent issues and any insurance coverage lapse.

How Long Do You Have to Update Your Existing Car Insurance Policy to a New Car?

Most states and insurance companies allow buyers to use their existing policies to cover their new purchases. This grace period can last anywhere from 2 days to as many as 30 days. However, some states and insurance companies don’t allow you to leave the dealership covered under this grace period. Be sure to check your current insurer’s state requirements and policies before heading to the dealership to complete your purchase.

If you need more than a single day, you can come back another day to finish the process. The dealership may offer a loaner vehicle if you don’t have transportation until you can secure your insurance for the new purchase.

What Temporary Coverage Length From the Dealer Is Best?

The best time frame to secure your temporary insurance from the dealer is 30 days, which is the length of a typical policy. It’s long enough to allow you to find a long-term policy for your needs. If you can’t obtain the temporary or standard insurance and you need to leave the dealership, you may ask the manager if they can provide a loaner vehicle until you can complete the coverage process for your new purchase. It’s up to the dealership’s management to approve any loaners for current customers.

Acquiring Your Policy or Adding a Vehicle

Whether you choose to secure temporary or traditional insurance, the process of obtaining insurance requires you to submit personal details and information about the vehicle. Some other information the insurer needs include the following.

  • Number of violations
  • Age
  • Drivers
  • Mileage each year
  • Location
  • VIN

Once you provide all the information, you’ll have a final quoted price. To secure the policy for the quoted amount, you’ll submit your payment. The insurance provider will send you a digital confirmation and documents once your payment is processed. Once you finish the transaction, download your insurance app or print your insurance cards for proof of insurance.

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Can You Drive Your New Car Home Without Insurance?

The only way to leave the dealership without proper insurance is to buy the vehicle outright in full. However, this action is not recommended because you can be involved in an accident at any time. Temporary insurance allows you the freedom to leave the dealership covered while you shop for long-term coverage.

What Do You Do If You Don’t Have an Existing Policy and the Dealership Doesn’t Offer Temporary Coverage?

Don’t leave the dealership without insurance coverage. If you buy a new or used vehicle from a dealership and require financing, you’ll need full coverage, which provides liability, collision, and comprehensive coverages. The vehicle should stay at the dealership location until proper insurance is active.

Final Thoughts

Before making your vehicle purchase from the dealership, make sure you know whether you have coverage in place. In some states, you have a grace period on your current insurance policy, allowing you coverage for a specific number of days until you can secure coverage specifically for your new purchase. However, if you can’t secure a grace period or other coverage, then you should select a company offering a shorter duration 6-month insurance policy that offers a zero dollar cancellation fee.

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About the author
Brian Greenberg author
Brian Greenberg
Founder and CEO
Brian is licensed to sell life, health, annuities, and property and casualty insurance in all 50 U.S. states. He is the author of The Salesman Who Doesn't Sell and is a member of the Million Dollar Round Table, an organization that consists of the top 1% of financial advisors worldwide.