Required Insurance Coverage for New Cars

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New car with the required insurance coverage traveling down a road.

Looking high-risk auto insurance you can afford?

There’s much to consider when buying a new vehicle, including how to pay for it (finance, lease, upfront payment) and getting the required insurance coverage for new cars. Insurance coverage for new cars can be more complicated for drivers needing SR-22 or FR-44 insurance. If your current insurance policy is inadequate, a licensed high-risk insurance provider will guide you through getting the necessary insurance with an SR-22 or FR-44 certificate filing.

Getting the required insurance coverage for new cars may not be the first thing on your mind when looking for a vehicle. After all, buying a new car is exciting! You head to the dealership to purchase your dream car, imagining how it will feel as you sit behind the wheel and cruise down the highway. However, you’ll have to jump through some hoops before enjoying the ride.

Middle-aged man standing next to his new car after getting the required insurance coverage.

Most states require minimum liability car insurance before you leave the dealership. The minimum car insurance coverage requirements for each state are available here.

Each state’s minimum auto liability insurance requirements may vary, and how you purchase your car is a factor in its cost. For instance, people who buy a vehicle with cash have different insurance requirements than those who lease or finance their new purchase.

How Your Method of Purchase Affects Coverage Requirements

Your minimum car insurance requirements will vary based on how you pay for your new car. Some insurance companies offer gap coverage when financing or leasing a car. Gap coverage comes into play in a significant accident where the vehicle is totaled or stolen. Without gap coverage, the car owner may be responsible for paying the depreciated difference out of pocket.


Financing a car will require additional coverage beyond your state’s mandated minimum liability coverage. Most people who obtain a loan on their new vehicle must also purchase comprehensive and collision coverage.


Leasing a new vehicle can drastically change the minimum insurance requirements. Generally, drivers who lease a new car must purchase comprehensive and collision coverage. In addition, it’s common for the deductible to have a $1,000 cap. Furthermore, many leasing companies require you to get more than the state minimum liability coverage.

Upfront Payment

Paying in full for your new car dramatically reduces the minimum insurance coverage requirements. You’ll only need to carry state-mandated minimum liability insurance coverage.

When Must You Get Insurance Coverage For New Cars?

Most dealerships and car lots require proof of insurance coverage before you drive a new vehicle off their premises. Since states have minimum insurance coverage requirements, you’re only legally eligible to drive if you meet these requirements.

On the other hand, if you have an existing car insurance policy, you may not need to get insurance on your new car immediately. However, it’s best to inform your insurance provider that you’ve bought a new car so they can transfer coverage to it. Generally, most insurance providers provide a grace period of 24 hours to inform them of your new purchase.

Will Your Existing Insurance Policy Cover Your New Car?

You’ll need to contact your insurance provider about your new vehicle purchase. Then, the insurance company will automatically transfer your coverage to your new vehicle. It’s worth noting that both cars will have the same coverage. It’s wise to read the policy terms and conditions carefully to understand how your insurance works.

Do New Cars Have Higher Insurance Premiums?

Required insurance coverage for new cars is often more expensive for most drivers because they either finance or lease their vehicles. As a result, these drivers must purchase comprehensive and collision coverage.

Insurance Coverage for New Cars from UltraCar Insurance

Are you searching for the required insurance coverage for a new car? UltraCar Insurance can help – especially if you need a high-risk auto policy. We’re a leading SR-22 insurance provider in 34 states nationwide and FR-44 insurance in Florida and Virginia. We also sell non-owner auto insurance policies if you don’t own a vehicle. Learn more about high-risk insurance coverage here, and call us or get an online quote today!