Do You Need Proof Of Insurance To Buy A Car?

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Buying a car should be a fun experience, but if you’re not properly prepared it can turn into a bit of a nightmare. There are a lot of things to keep in mind and not least of which is the need for insurance. Obviously, insurance is a must for anyone that’s looking to purchase a new car, but the question is do they need proof of insurance before buying the car? The answer is a simple yes – in Ontario, you have to have insurance before you can register as the owner of a car.

Adding A Car To Your Existing Policy

For most of us, the process of obtaining insurance for our new (or new for us) car should be fairly straightforward. We simply pick up the phone, call our insurance agent, provide them with the information about the new car, and they’ll get the new car placed on the policy. Keep in mind they will need to know the make, model, year of the car, and eventually its VIN number.

What If I Want To Drive a Car off The Lot The Same Day?

Unless a potential purchaser of a new car arrives at the dealership with cash in hand there isn’t much chance of driving off the lot the same day in that new car. For one thing, they need to find financing first and there is zero chance that a finance company will provide the money to someone that hasn’t proven they have an existing insurance policy. When financing a car the company providing the financing will absolutely insist on having proof of insurance before they can leave the lot – even if they have the best credit rating in the world.

For someone that does have the cash to purchase a new car outright, it is possible to drive a car off the lot the same day. It will require them to get in contact with their insurance agent while at the dealership and have them fax over a copy of their temporary insurance policy to get the ball rolling, but it can be done. In most cases, it’s probably better to take a couple of days to make sure everything is done correctly. 

What If I Don’t Have an Existing Insurance Policy?

Car Insurance Policy

Anyone that wants to purchase a new car will have a difficult time without an existing insurance policy of any kind – especially if they’ve never had insurance of their own before. In any case, no insurance company will open a new policy without meeting with the new client in person. These are the types of things that need to be sorted out ahead of time.

Insurance Isn’t Optional

Aside from the fact that finance companies and dealerships won’t proceed until they have proof of insurance, it’s not in anybody’s best interest to drive a car without insurance anyway. If someone drove a car off a lot without insurance and was in an accident shortly thereafter they could be on the hook for a very large bill – not to mention some legal problems. The simple answer to our original question is that you must have proof of insurance to buy a car.

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