Do Car Dealerships Offer Temporary Insurance?

When you purchase a new or used vehicle from a car dealership, having auto insurance is required before driving off the lot. But what if you don’t already have coverage lined up? Do dealerships offer short-term or temporary insurance plans?

The answer is complicated, but this guide will explain how insurance at car dealerships works, your options for coverage, and tips for getting the right policy at the best price.

Can You Get Temporary Insurance at a Car Dealership?

Car dealerships themselves do not sell insurance policies directly to customers. However, many dealerships have partnerships with local insurance agencies or brokers to provide quick coverage for purchases.

So in most cases, you can purchase a standard auto insurance policy from an agent at the dealership that will cover you temporarily until you secure your own long-term policy. But there are a few caveats:

• The dealership’s insurance partners generally won’t offer short-term policies less than 30 days. You’ll likely need to buy a 6-month policy at minimum.

• Policies from dealership insurance partners tend to be more expensive than if you shopped around and compared quotes.

• You are not obligated to use the dealership’s insurance – you can arrange coverage beforehand.

• Temporary insurance plans sold in increments like 7 days or 30 days are not legitimate products in the auto insurance market. Avoid any dealer claiming to offer these.

Why Do You Need Insurance When Buying a Car?

All states require minimum liability auto insurance coverage to legally drive a vehicle off a dealership lot. This protects you and others in case of an at-fault accident.

Dealers verify insurance before finalizing sales to avoid liability for any subsequent incident with an uninsured driver. Specific requirements vary by state but expect to show proof of insurance at purchase.

Even if not required, having comprehensive and collision insurance is highly recommended to fully protect your new vehicle investment against damage.

Do Dealerships Offer Insurance for Test Drives?

When you take a vehicle for a test drive at a dealership, their insurance policy will provide coverage. As commercial businesses, dealers are required to maintain garage keeper’s liability insurance which protects both the dealer and you as the driver in a test drive situation.

However, some dealerships may have you sign a waiver stating you accept liability and won’t hold the dealer responsible if an incident occurs during the test drive. Review any waivers carefully before signing and consider refusing to sign if you have concerns.

Your own personal car insurance may also extend coverage for test drives depending on your policy. Non-owner insurance definitely applies. Check with your insurer before testing a vehicle at a dealer.

Alternatives for Getting Temporary Car Insurance

While you can use a dealership’s insurance partner for temporary coverage on a new purchase, here are some other options that may get you a better rate:

• Shop ahead of time – Get quotes before visiting dealers so you have an affordable policy ready to activate. Rates are set regardless of exact car details.

• Use your existing insurer – Have your insurance agent add the new car to your policy if you have prior coverage. This ensures continuous protection.

• Buy online – Use insurer websites or online insurance brokers to quickly compare quotes and buy a policy. No agent needed.

• Consider usage-based options – Pay-per-mile insurance can be very affordable for driving a new car short term if your mileage will be low.

• Cancel when done – Get a standard policy but cancel it after a month or two once you have longer-term insurance arranged. Just check cancellation fees.

How to Get the Best Car Insurance Deal from a Dealership

If you do need to secure insurance on the spot when purchasing from a dealership, follow these tips to save:

• Verify requirements – Check that the dealer’s minimum insurance requirements align with state laws so you don’t overpay.

• Ask for discounts – Inquire about discounts for bundling, paying in full, prior insurance, new car safety features, alumni associations, etc.

• Raise deductibles – Higher deductibles equal lower rates, so choose the highest you can afford. You can lower it later.

• Limit coverage – Skip comprehensive and collision coverage if not required or if you have an older car. Add it later.

• Compare quotes – Make sure to check rates from the dealer’s insurance partners against other options.

• Provide accurate info – Giving correct driver and vehicle details gets you the best rate. Don’t approximate.

• Check alternate payment plans – Avoid large upfront payments that inflate pricing. Pay monthly or quarterly.

Following these tips can help minimize the insurance expense when buying a car from a dealership. But shopping around beforehand is still likely to save you the most on temporary coverage.

When Would the Dealer’s Insurance Make Sense?

There are a few scenarios where using the insurance offered through a car dealership could potentially be your best or only option:

• You need a car immediately and don’t have time to insurance shop.

• You have a poor driving history and may not qualify for standard insurance.

• You have no credit history which can make insurance enrollment tricky.

• You need a policy to comply with state minimums but want minimum coverage.

• You plan to resell the vehicle very soon so only need insurance short term.

For most buyers however, dealership insurance should be a last resort if you couldn’t get coverage arranged in advance. Make sure to replace it with a better policy quickly.

Can You Drive Off the Lot Without Insurance?

All states require minimum liability insurance coverage to legally drive a newly purchased vehicle off the lot. The dealership will verify you have active insurance before finalizing the sale.

Driving a newly purchased car without insurance violates financial responsibility laws and puts you at massive financial risk in case of an accident. It also exposes the dealer to liability for allowing you to drive off their lot uninsured.

There are rare cases where you may be able to take delivery of a new vehicle while briefly uninsured under a “storage insurance” plan, where you transport the vehicle home without driving it. But coverage must be in place before you actually operate the vehicle.

Attempting to drive off without insurance will shut down the purchase process immediately. Don’t even consider it.

Other Related Insurance for Car Dealerships

Beyond the temporary insurance plans offered through partners, there are a few other insurance considerations relevant to auto dealerships:

• Garage insurance – Covers dealership liability, buildings, inventory and equipment. Required to operate. Includes test drive coverage.

• Loaner car insurance – Policies to cover vehicles provided as temporary replacements during service.

• ** GAP insurance** – Optional protection for a loan or lease payoff gap if the car is totaled. Offered with dealer financing.

Discuss any insurance add-ons like GAP coverage during the purchase process to understand included protections.

The Bottom Line on Dealership Temporary Car Insurance

While car dealerships don’t sell insurance directly, they often work with local insurance agents and can provide quotes and policies to cover your new vehicle purchase temporarily. However, this dealership insurance will likely be more expensive than shopping around on your own.

Consider alternatives like getting quotes ahead of time, using your existing insurer, buying online or cancelling when no longer needed to find more affordable temporary coverage. And avoid any dealer offering ultra short-term insurance under 30 days – it’s not real.