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Buying a used car can be exciting especially a first-hand one. While you may be eager to finalize the deal and hit the road you need to consider the buying process. If youve never bought a used car you may be wondering if you need insurance with your purchase. Lets dive into the detailed answers so you know everything you need to know get insurance before buying used car.
Do I Need to Buy Car Insurance?
While you dont need to make a purchase you do need to have insurance in order to pick up the car from the lot which basically means you cant buy a used car without insurance. If you purchased from a dealer and not from an individual you will be asked to register the vehicle. Anyone who wants to buy a new or used vehicle must purchase a minimum amount of auto insurance in the state before registering the vehicle and obtaining license plates. Depending on whether or not you are financing the purchase other documents such as proof of income proof of residency identification and similar documents will also be required.
The first condition is insurance. If you are financing your vehicle you likely need comprehensive coverage otherwise your state may only require liability or minimum coverage. If you bought your car from a dealer you should be prepared to provide proof of insurance. You should also provide them with a copy of your drivers license financial documents and a completed registration form among other documents.
Why Is Full Coverage Required For Financed Vehicles?
Full coverage is required when financing new or used cars. When you get a loan to buy your car the lender is the legal owner of the car until you repay the loan. If you owe money on the car youll need comprehensive collision and possibly uninsured motorist coverage. Basically if your lender owes you money on the vehicle they want to protect their interest in the vehicle if the vehicle breaks down or breaks down.
To get an idea of how much youll be spending we pulled the National Association of Insurance Commissioners (NAIC) average prices for the various types of core insurance you need to buy a vehicle.
Do I Still Need A Separate Policy For My Used Car?
If you already have other car insurance you dont need to add cover to your used car before buying. Your current coverage will apply to your used car for a short period of time – check with your insurance company and state laws to see how long youre covered. You should immediately contact your insurance provider to create a new policy for you after you make your purchase. Vehicles When you add your used car your insurance rates may increase depending on whether or not you trade in another vehicle.
Choosing Car Insurance Before Buying A Used Car
There are many insurance providers and types of coverage so do your research before purchasing coverage. Insurance can be included in your sale if you buy a car from a registered car dealer. But if youre buying a used car you can ask someone about existing insurance or get a new policy to get insurance before buying used car
The CTP covers all vehicles but you may want to consider purchasing additional vehicle insurance that provides more coverage. If you need a quote or a new policy you will need to choose one from a third-party proprietary or comprehensive policy. A third-party property policy covers any property damage such as when you accidentally break into your home. A comprehensive policy is the highest level of protection you can get. Covers anything that may happen including replacement costs when the vehicle is deemed beyond repair. Buying auto insurance before buying a used car can be a wise investment as many features of the car wear out.
Types Of Car Insurance For Used Cars For You
CTP Insurance
Before registering your car get insurance before buying used car you must have compulsory third party insurance (CTP). Some states and territories include this in the registration fee so check how your state or territory handles it. CTP insurance will cover the cost if your car is involved in an accident and a third party suffers bodily injury or even death.
CTP insurance will be transferred to you along with registration and title if the vehicle you purchase is actively registered. This is because CTP policies are issued to the vehicle and not to the owner. Once ownership is transferred the details linked to your State or Territory Road Vehicle Authority will also be transferred to the CTP. Check the CTP insurance rules and requirements in your state or territory as insufficient coverage can lead to fines.
Third-Party Insurance
CTP covers any damage you may cause to a third party if you are involved in an accident while third party property insurance covers damage to someone elses vehicle or property. If you only buy third-party property insurance your car is not covered. Another aspect you should consider is including uninsured motorists coverage when getting auto insurance when buying a used car. In part this warranty covers damage to your car caused by uninsured driving.
Third party fire and theft insurance is another form of third party insurance that also covers damage to your vehicle. You can read the policy brochure and product disclosure statement to determine if a particular insurance policy is right for you. There may be conditions on who can drive the car you have insured which are usually specified in these documents.
Comprehensive Insurance
Comprehensive coverage is the highest level of coverage you can get with car insurance. It offers you coverage against any type of loss or damage to your vehicle and others.
Premiums are the most expensive of the types of auto insurance weve discussed. This is mainly determined by a number of factors related to the drivers age claim history and parking. This policy is not transferable between car owners but it is transferable between cars. So if you currently have a comprehensive policy you can transfer it to your newly purchased car or add the new car to the policy as an add-on. Be sure to read all the policy details and compare policies from different insurers before choosing the right one for you.
