What is the New Car Insurance Grace Period?
- If you currently have an active insurance policy, you may be allowed a grace period of 7 to 30 days to add the new car to your policy.
- Your insurance automatically extends coverage on a newly purchased vehicle during this period.
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Auto insurance grace periods explained
A car insurance grace period is the time you can drive a new car before adding it to your policy. The length varies by insurer, but you must always have coverage when driving. If you don’t already have a policy, you're uninsured and won't get a grace period, meaning you’ll need a new policy before leaving the dealership. Luckily, car insurance quotes are free, and the best policy for you can be put into place rather quickly.
Is there a grace period for getting auto insurance on a new car?Â
In short, yes. Your insurance grace period for a new car depends on your insurer and current coverage. If you have an active policy, you may have 1 to 30 days to add the new car, and most insurers will extend coverage during this time.
If you purchase a car from a dealership, expect the dealer to confirm your insurance status before you drive off the lot. This is especially true if you lease your car, as the car dealership is still technically the owner of the vehicle.Â
If you're uninsured, you'll need a policy before driving, but same-day coverage is common and can be set up at the dealership with a down payment.
Be sure to remove your old car from your policy to avoid issues down the line. Likewise, if you are financing a new car, chances are that your lender will require more than just liability coverage; lenders will also require comprehensive and collision coverage to protect their stake in your loan.
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Is there an insurance grace period when buying from a private seller?Â
When buying a car from a private seller, the same rules apply. All drivers are required to have insurance. Again, if your insurance company allows a grace period, coverage will extend to you and the vehicle from the time you drive it home until the end of the allotted period.
Unlike a dealership, a private seller isn’t likely to require proof of insurance before driving off. If you don’t currently have a policy, it’s best to purchase coverage as soon as you decide to buy the vehicle. Remember: it doesn’t take long to get insured, so it’s best to compare quotes early.
What happens if I'm involved in a car accident during my insurance grace period?Â
As long as the collision occurs within your insurance company’s grace period, you should be covered. Your coverage limits will be the same as they were on your previous vehicle. For instance, if your policy includes full coverage (collision and comprehensive), that coverage would extend to your new vehicle. You can expect your insurance rates to rise if you file a claim. The table below outlines the average annual rates after specific violations, such as an at-fault accident.Â
Updating data...
| Accident/Violation | Avg. Annual Premium |
|---|---|
| Speeding 16 - 20 MPH over limit | $2,190 |
| At-fault accident - greater than $2000 | $2,605 |
| Reckless driving | $3,187 |
| Racing | $3,291 |
| DUI | $3,441 |
Source: The Zebra
Yes, many insurance companies offer a grace period for premium payments, allowing policyholders extra time to pay after the due date before the policy is canceled. The length of this period varies by insurer and policy type. If you miss payment after the grace period is over, you risk policy cancellation and a lapse in coverage.Â
What happens if I have a lapse in coverage?Â
Letting your auto insurance lapse can result in serious consequences. For one thing, you’ll be personally liable for any accident damages. Additionally, reinstating your policy will likely mean higher rates, as insurers see cover gaps as an elevated risk factor.
For example, drivers with five years of continuous coverage pay about $216 less per year than those with no recent history. Stay insured and start comparing quotes as soon as possible to avoid these pitfalls.
Car Insurance with a Lapse in Coverage
Gone without car insurance? Consult our guide for details.
What to remember about buying a new car
Getting a new car can be exciting. However, don’t allow your excitement to keep you from taking care of important details like securing insurance coverage. It’s vital to get coverage as soon as possible. A dealership won’t contact your insurance company for you. If you are uncertain as to whether or not your insurer will build in a grace period, contact your insurance agent or company before the purchase to make sure.Â
It’s always better to update your coverage than to rely on an insurance company’s grace period. Remember that getting insurance doesn’t have to be difficult or take too long.
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.