Technically, you can buy a vehicle without insurance. However, whether you’re buying a new or used car, you need auto insurance to drive it home — specifically, a policy that meets your state’s minimum amount of liability insurance. Most car dealerships won’t allow you to leave with the car unless it’s insured first.

Do you have to have full insurance to buy a car?

Since carrying full coverage on the car is a contract requirement, you must be able to show that you have both comprehensive and collision coverage. Some dealers will have you sign a legally binding document stating that you have the coverage that’s required and others will ask to see the proof. Why is full coverage required on financed cars?

What does full coverage mean for auto insurance?

The term full coverage auto insurance refers to a car insurance policy that includes comprehensive, collision and liability. This means that your car will be repaired or replaced minus your deductible under several different types of conditions: Comprehensive insurance covers everything that isn’t a car accident.

What kind of insurance do I need to finance a car?

Most conventional lenders require borrowers to purchase full coverage insurance on the vehicle while the lender is a co-owner of the car. Full coverage insurance consists of physical damage coverage and the state’s minimum coverage requirements. Lessors may even require their borrowers to carry higher limits of liability for added protection.

When do you no longer need full coverage on your car?

The only time you absolutely need, as in are required, to have full coverage is when you don’t own the vehicle outright. If you are still making car payments, then the dealer’s finance company or your bank — whoever the lienholder is — will most likely require that you carry full coverage until you have paid off the loan.