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Do I need insurance on my old car if I'm planning to sell it?

I'm buying a new car and replacing my old one. I plan to sell the old one but will only drive the new one after I get it home. Do I have to insure both cars? Is there a grace period or anything, or do I have to keep both of them insured as long as they're in my possession?

May 20, 2023 Minneapolis, MN

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Ava Lynch

Insurance Analyst

  • 7+ years of Experience in the Insurance Industry

Ava joined The Zebra as a writer and licensed insurance agent in 2016. She now works as a senior insurance contributor, providing insights and data a…

There are a couple of things to consider in your situation. Any grace period would depend on the exact details of your current policy. While most policies do include a grace period, it really depends on your current company. If there is a grace period, it would apply to the new car as long as you keep your initial car insured.

In most cases, whatever coverage you have on your current vehicle would transfer to your new vehicle. So, if your old vehicle is liability only, your new car would only have that coverage. Which, in the event of an at-fault accident, would leave you on the hook for all damages to your vehicle. Likely, if you're buying a newer vehicle, it will be worth more than your old one. If you only carry liability, you'll probably want more coverage than that on your new purchase. If you already have a general idea of what you'll be buying, how much you'll be spending, etc., then you have time to consider what coverage you might want to add. Even if your old coverage carries over, I still recommend getting your new vehicle added to your current car insurance company ASAP to avoid any issues going forward.

The second thing I would think about is if you're going to allow test drives for your vehicle while you're in the process of selling it. If it's going to be a trade-in, you don't need to worry about it, but it sounds like you'll be handling the sale yourself. If you are, I would keep your car insurance until the new owner has insured the vehicle and you've transferred the title over. Most car insurance policies follow the car, not the driver. So, if someone was test-driving your vehicle and were to get into an accident, your insurance would take over first.

If you want to compare auto insurance quotes or talk about policy options for multiple cars, feel free to give our agents a call at 888-255-4364. Thanks for reaching out to The Zebra, best of luck!

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