First time buying car and auto insurance?

by scryedzxp » Fri Jan 28, 2011 02:54 am

It seems that I need auto insurance before I can drive the car off the lot (if/when I purchase it). This would be my first car meaning I don't have any previous insurance. Does that mean I need to purchase insurance from an agency before I go to a dealership or do I purchase it from the dealer? If I purchase from an agency beforehand, I don't see how I can do that; they all ask for the car information -- which I obviously don't have. So is the only option to purchase from the dealer? Also, I'm assuming the insurance from the dealer is a temporary thing, meaning it only covers the car for a short period of time and shouldn't be used in place of insurance offered by agencies (allstate, geico, etc)? Or am I getting this all wrong and the dealer actually purchase insurance from one of those agencies (and simply acts as a middle man)?

I'm in Washington, by the way -- because I know that some things vary from state to state.

Total Comments: 9

Posted: Fri Jan 28, 2011 03:01 am Post Subject:

You speak to an agent before hand, buy the car and call or quickly visit the agent so that they can bind coverage. You do need to obtain a binder from the agent and have this in the vehicle at all times.

In other words, you buy the car and leave it on the lot and then get the insurance. It usually only takes an hour or less to get a policy.

I'd recommend getting insurance from an agent. The dealer _is not your friend_ when it comes to insurance. Also, a licensed agent needs to sell it.

Posted: Fri Jan 28, 2011 03:09 am Post Subject:

Thanks for the super quick and informative response, tcope.

How long will I be able to leave the car at the lot? I'm assuming it varies?

Also, how would this fit into test driving the car? In other words, would I need some sort of insurance to test drive it?

Posted: Fri Jan 28, 2011 03:12 am Post Subject:

Funny you should ask... I just bought a vehicle tonight and I'm not picking it up until tomorrow evening. I don't know exactly but I suspect a dealer would not have any problem keeping it for 2,3, 4 or so days. After all, they just made money by selling it. But getting an insurance policy should only take an hour or less.

Posted: Fri Jan 28, 2011 03:14 am Post Subject:

What about test driving the cars? Would I need some sort of insurance for that?

Posted: Fri Jan 28, 2011 03:19 am Post Subject:

Well, the dealers policy _should_ provide coverage for them and the vehicle as required by law. At worse, it might not consider you as an insured. In some states the other party can hold the driver and the owner responsible... not just the driver. But it works like this... if you hit someone then they are going to hold you responsible. But the dealers policy should step up and settle the claim for the dealer. The won't protect your interest but if they settle the claim then I doubt anyone is going to look to you for anything else anyway.

So, if you had a policy it would offer you protection even though you probably would not need it. The dealers policy is on the vehicle so it's legal for you to drive the car without having insurance.

Posted: Fri Jan 28, 2011 03:37 am Post Subject:

What I like about your responses is that you always summarize your post into a short and concise sentence after you've provided all the details. I mean I was able to understand what you said but it's always nice to have extra clarification.

Thank you very much, tcope!

Posted: Fri Jan 28, 2011 08:59 am Post Subject:

would I need some sort of insurance to test drive it?



As tcope has said, you probably don't need insurance to test drive a vehicle, just a driver license.

And it's not the dealer that requires you to have insurance to take delivery of an automobile, it's the lender. You owe them the money they advance to the dealer to buy the vehicle. They want to be assured that they will recover most of what you owe them from your insurance company in a worst-case scenario.

As you are considering buying a vehicle, it's always a good idea to get some quotes for insurance on the make/model you are considering, so you aren't surprised by the cost AFTER you have signed the purchase contract.

Posted: Fri Jan 28, 2011 11:22 am Post Subject:

I haven't heard of someone applying for insurance only to get a test ride. But yeah, if you're considering a car purchase, insurance should come to your mind automatically.

Posted: Fri Jan 28, 2011 02:15 pm Post Subject:

And it's not the dealer that requires you to have insurance to take delivery of an automobile, it's the lender.

That and in all but about 3 states the state requires liability insurance on the vehicle before it's drive on public roads.

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