Buying A New Car Insurance Grace Period

Driving a car without insurance is illegal in all states of the US. This explains why, even when you are buying a new car, you must provide proof of insurance for your new vehicle before you can take it home. And now comes in the question of when do you buy your car insurance? 

Well, there is no silver bullet answer to that question and this because there are various factors that need to be put into consideration when it comes to car insurance. But in this piece on buying a new car insurance grace period, we will try to give the answers on buying new car insurance based on some common considerations.

Are You Buying Your First Car?

If you’re a first-time car owner, you will be required to set up your car insurance policy before you can take your new car from the dealership. Take your time comparing rates from the leading car insurance companies in your area and make consultations where necessary before settling with a specific insurance provider and insurance policy. 

Once all this is done, you’ll be needed to visit the dealership where you are to purchase your car then call your agent, give him your vehicle identification number and request for your insurance policy to be activated.

This is, however, different for people looking to buy a new car, but had previous coverage on their old vehicle. In the US, some insurance companies provide a grace period for buying a new car. The new vehicle will be covered for a short period until the new owner can get proper cover. The grace period varies from company to company, and the car owner will need to get new car insurance cover.

But first, what is a grace period when buying a new car? Well, when talking about insurance in general, the “grace period” refers to the time in which insurance providers allow their customers to make their insurance payments way past the regular due date. 

However, in the context of buying a new car, that is not your first car, the “grace period” refers to the temporary coverage extended to your new vehicle from your already existing policy, that allows you to legally drive your new car for a certain period before buying insurance for your new car.

How Long Is The Buying New Car Insurance Grace Period?

There is no standard period for how long the grace period for purchasing insurance for a new vehicle by pre-existing car owners should last. But the average is anywhere between 7 days to 30 days after purchasing your new car, depending on the insurance provider and the state laws. This means that in the mentioned timeframe, you are expected to notify your insurance provider that you purchased a new car.

Also be aware that even though most insurance companies do offer grace periods for buying new car insurance to their clients, not all of them do. So to be on the safe side, give your agent a call first and confirm whether your insurance policy extends to new car purchases.

Are You Replacing Your Old Car Or Adding A New Vehicle?

Whether you are merely buying a new car to replace the old one that you want to get rid of or are adding a new vehicle to your fleet, it will impact the length and the coverage of your new car insurance grace period.

If you are buying a new car to replace your old one, your existing car insurance policy should automatically cover your new car for the stipulated grace period according to the policy. Also, the insurance policy should cover the same incidents that were covered in your old vehicle, such as accidents and other damage.

If you are adding a new vehicle to your already listed vehicles under your car insurance policy, then the outcomes of the buying new car insurance grace period may be very different. For starters, in most cases, if your policy extends any grace period when adding a new vehicle, this grace period will be significantly shorter compared to if you were replacing your old car. 

This means that you are required to notify your insurance provider of the new car acquisition much sooner. Also, be expectant of your insurance premiums increasing as the addition of a new car exposes your insurer to paying higher insurance claims.

Pro Tip: If you have liability coverage only on your existing car insurance, the smartest thing to do is to contact your agent and have them include comprehensive and collision coverage in the policy for your new car. Anything can happen during the grace period for getting insurance for your new car. You’d rather be safe than sorry in case you get involved in an incident or accident.

Are You Leasing A New Vehicle?

When it comes to leasing a new vehicle, the buying new car insurance grace period is still dependent on the insurance provider and relevant state laws. What is, however, a constant fact that upgrading your insurance cover to include comprehensive and collision coverage for the leased vehicle is a MUST and should be done before you can get the keys to your new car. It should not take your insurance more than 24 hours to ensure you satisfy these insurance conditions and have an insurance coverage ready to allow you to acquire your new car lease. 

Whether you are leasing a new vehicle, purchasing a new car to add to your already existing vehicles or replacing your old car with a new car, you should now have an idea of what to expect when buying new car insurance grace period. When asked for proof of insurance at the dealership before purchasing a car simply provide your previous insurance coverage. And if the dealership requires extra proof, you can contact your car insurance agent and have them fax or email the requested proof of insurance.

If you forget everything else mentioned on this piece, please remember that these guidelines vary depending on insurance providers and state laws. So contact your agent before leasing or purchasing a new vehicle and get familiar with all the necessary information. Missing your grace period’s deadline or driving a car without insurance altogether are very costly mistakes. Avoid them by getting the relevant information from your car insurance agent.

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