Do You Buy Car Insurance Before Buying a Used Car?

Written by michael wolfe
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Do You Buy Car Insurance Before Buying a Used Car?
You generally need to buy car insurance before purchasing a car. (Cars image by Ellanorah from Fotolia.com)

Prospective buyers of used cars, like new cars, are legally required to purchase car insurance on their vehicles. Generally, a car cannot be driven until an insurance policy has been purchased for it.

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State requirements for auto insurance vary. However, all states require that drivers have some form of insurance on the vehicles they drive. When buying a used car, the insurance policy can be drawn up before a car is actually purchased -- the insurance company will require the car's VIN number -- and then put into effect after the car is bought.

Considerations

There is no loophole for driving without insurance after purchasing a vehicle. Even if the vehicle is being driven to an insurance agent, it must still be insured. However, state laws on producing proof of insurance vary. In some cases, a car can be insured, but the driver does not have to produce proof of this insurance for several days after its purchase.

Warning

Penalties for driving without insurance vary by state but generally are quite steep. Penalties can range from one or more fines to a suspended license. A failure to carry proof of insurance is also a legal infraction, although penalties for this offence are much less severe.

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