Good news — you don’t need to have a car insurance policy of your own to test-drive a car. Although a dealership or a private seller may ask for proof of insurance when you are taking a car out on a test-drive, it isn’t required and you will still be able to test-drive a vehicle without it.
The dealership (or the private seller) will have insurance coverage in place to protect the vehicle in case of an accident. However, you will still be responsible for any damage you cause that exceeds the limits of their coverage, so it can be useful to have your own car insurance policy in case of a serious accident during a test-drive.
Do you need proof of insurance to test-drive a vehicle at a dealership?
No, you don’t need proof of insurance to test-drive a vehicle at a dealership. The car dealership has insurance that covers the car when it is taken for a test-drive. The dealership may ask for a copy of your driver's license and proof of insurance, but the proof of insurance is usually not required.
There are a number of reasons someone might test-drive a car without a car insurance policy, including:
If they’re buying their first car.
They sold their car due to a lifestyle change, like working from home, but things have changed again and now they need a car again.
They just want to try out a car.
Do you need proof of insurance to test-drive a vehicle owned by a private seller?
No. Insurance follows the car, which means you would be covered by the owner’s car insurance policy if you were in an accident while test-driving their car. It’s their responsibility to make sure they have insurance for any vehicle they own, even when they’re in the process of selling it.
However, it is possible that the current owner may only have the minimum amount of coverage required by law in their state, which means you could potentially cause an accident that leads to more damage than they are insured for and, if that happens, you might be on the hook for the costs. If you do have your own car insurance policy, that’s where it could come in as secondary insurance.
Do you need insurance to buy a car?
Yes, drivers are required to have insurance for a new vehicle before they can drive it off the lot.
If you already have an active car insurance policy for another vehicle, you can call your insurance company and have them add your new car to your current policy before the dealership gives you the keys to your new ride (you usually have a grace period of at least a day or two to add a new car).
If you don’t have car insurance yet, you can buy a new policy while you are waiting for the dealership to process the paperwork for your new car. You just need to know the vehicle identification number (VIN) of the car you’re buying in order to buy insurance.
You can buy a policy online, either directly from an insurer or from an online marketplace like Policygenius, or you can call a car insurance company directly and set up a policy over the phone, usually in under an hour. As soon as you make your first payment, your policy is active and you’ll have the proof of insurance you need to take your car home.
Can you finance a car without insurance?
No, you can’t finance a car without insurance. In fact, your lender likely requires you to buy car insurance as a condition of the loan, which means letting your car insurance lapse could cause problems with your loan or lease.
Many lenders even state in the terms of your loan that the finance company will charge you for car insurance provided directly through the lender if you let your policy lapse. This means not having your own car insurance policy on a financed car could leave you stuck paying much higher rates on a policy you didn’t choose.
Your car loan likely requires you to have a full-coverage policy, which includes liability insurance, comprehensive insurance, collision coverage, and gap insurance. Getting multiple quotes before you buy a policy can help you make sure you are getting the lowest possible rate.