A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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Here's what you need to know...

  • When you buy a vehicle, it’s important that you verify that you have insurance coverage that will be effective from the moment you drive off the lot
  • Licensed drivers who already have their own existing coverage will have an automatic coverage extension as long as the car that is being purchased is in their name
  • Once the automatic coverage period is up, the vehicle must be added to an existing policy for coverage to apply without any lapses
  • If you’re buying a vehicle from a private party and must register it on your own, you need to have insurance with the minimum coverage requirements in hand before going to the Department of Motor Vehicles
  • Many state motor vehicle agencies require proof of insurance before a new license plate or registration can be issued when transferring ownership

You might look forward to buying a new car, but virtually nobody looks forward to their mandatory trip to their local motor vehicle agency. If you’re buying a car from a private party or you’re transferring ownership from another owner to yourself, you must bring all of the documents and reports required by the state. If you fail to apply for license plates in a timely manner or you forget to bring a document that’s required, you could face penalties and delays. Compare car insurance rates now by using our FREE tool above!

There’s a common debate as to what came first, the chicken or the egg. This entire topic of debate is about what comes first, the insurance or the registration. You need both active insurance and a valid registration to legally drive a vehicle throughout your town or city, but deciding which to get first can be difficult. Here’s what you need to know so that you don’t make a decision that creates more work for you.

Buying a Car From a Dealership

Dealing with commission-based car salesmen probably isn’t your idea of a fun weekend. Even though car salesmen don’t have the best reputations, there are some major advantages to buying a car at a lot rather than buying the car from a private party.

Since the dealership is a business establishment, you’ll have certain protections that aren’t afforded when you’re doing business with a private seller.

Not only do you have more protections when you buy a car from a dealer, most dealerships will help you skip to the trip to the DMV because they handle transferring the car’s ownership for you. Since all the documents are completed in the finance office before the sale is complete, you can skip the trip to the DMV and avoid all of those frustrating delays.

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Do you need insurance when you buy a car from a dealer?

You might think that the insurance debate is up if you don’t have to make the stop at the DMV, but that’s not the case. When the dealer handles your paperwork for you, it just means that you have to have your eggs in a row earlier before visiting the lot and deciding on the vehicle of your dreams.

If you don’t yet own a vehicle, you’ll need to quote and secure coverage before you drive off the lot with your new car. The dealer will make sure that you have active insurance by asking for your proof of insurance before you leave. These dealers have a responsibility to follow DMV guidelines and this is why it’s required to submit proof of liability insurance at a minimum. The dealer might also ask for proof of full coverage if you’re financing the car and you need full coverage to satisfy the loan requirements.

How to Prepare to Go to the Dealer

To make it easier on you, you can request quotes for several different cars and get the quotes ready to bind. Once you have the VIN and vehicle information, you can easily bind the coverage with the most affordable carrier by picking up the phone and providing the information. On some platforms, you can even bind the coverage and modify your quotes and applications online. This is why research is so important when you’re looking for affordable auto insurance.

What if you have existing coverage in place before you buy a car from a dealer?

If you already own a vehicle and you’re going to the dealer to trade it in or buy an additional car, satisfying dealer requirements is much easier. Under your existing Personal Auto Policy agreement, your coverage will extend to a new car purchase for a limited amount of time.

The actual amount of time that coverage extends will vary between carriers and states, in most cases, you will have the broadest form of coverage on the policy for between 14 and 30 days.

If you don’t have full coverage, the company may offer you comprehensive and collision on the newly acquired vehicle for up to 4 days. It’s up to you to add the new car or replacement car in a timely manner or you’ll have a lapse in coverage and may face penalties with the DMV.

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Buying a Car from a Private Party

If you’re buying a car from a private party, you might have more power to negotiate the price but you’ll have to visit the DMV on your own. When you visit the DMV you’re required to bring all of the documents that you need to transfer ownership and get your new registration. The easiest way to get in and out of the agency office is to make an appointment and bring everything that you need.

Checklist of Items You Need to Register Your Vehicle

If you’ve never purchased a car or you’ve never bought a car from a private party, you might not know what to bring with you. Luckily, you can find all of this information on your state’s official website. Here are the most common requirements:

  • An application for title or registration
  • The last issued title signed over to you
  • VIN verification
  • A smog and inspection certificate issued by an approved station
  • Fees
  • Proof of liability insurance

What if you don’t have insurance before registering your car?

If you decide to hold off on getting insurance, you could be at risk of having an uninsured loss. You could also be denied a registration for coming in without all of the proper documentation. Individuals who are issued a registration without their insurance could be penalized or cited for failing to have coverage from the time their registration became effective.

At the end of the day, you’re required to have your insurance before you register your car.

As long as you have a bill of sale, you can show the insurer that you have insurable interest in the car before it’s officially in your name. Start to comparison shop premiums by using an online tool and then make a choice. Once you know what carrier is priced right, you can submit your application and print out your ID cards within minutes. Enter your zip code in our FREE tool below to compare car insurance rates now!