In 2023, over 15 million new vehicles were acquired in the United States, but not all car owners necessarily bought a new insurance policy. Many of them just transferred insurance to a new car, getting the same peace of mind on the road and saving on payments.
Read on to learn more about how to transfer insurance to a new car, associated costs, deadlines, and other important legal nuances.
How Does Auto Insurance Transfer From an Old Vehicle to a New One Occur?
If you want to transfer insurance to a new car, you need to contact your insurance company first. Depending on their policies, you can update your insurance online, over the phone, or by visiting their office.
Here are the key steps to transfer your insurance to a new car:
- Inform your insurance agency of your intention to transfer car insurance to a new car. Note that you may need to confirm the policy in some states before registering the purchased vehicle, so it makes sense to talk to your insurance agent before completing the transaction.
- Review your current auto insurance. The premium may increase if the purchased car is older or more expensive than your old one. Analyze your situation and determine whether you need to add or remove any additional policies. Keep in mind that when buying a car on credit, your creditors may require comprehensive insurance.
- Provide information about the new car. You will need to provide the insurance company with the following details:
- Vehicle Identification Number (VIN)
- Make and model of the car
- Year of manufacture
- Receive a new quote. After entering all the necessary information, the insurer will calculate the exact amount for the transferred coverage. At this stage, you also need to specify if anyone in your family will be using the car, as many companies request this information for a better understanding of the client’s situation.
- Clarify the question of additional expenses. Transferring insurance to a new car may increase your premium. Some insurers may spread the difference over several monthly payments, while others may require a prepayment.
- Receive confirmation of a successful transaction. Before getting behind the wheel of your new car, make sure that your insurance is updated and active. The insurance agency should notify you in writing about successfully transferring your insurance coverage to the new vehicle.
When a family member purchases the car, you may not need new coverage; instead, you can simply add a car to your existing insurance. For this, contact your insurance agent and provide them with the details of the new vehicle. This is a simple and quick process and can be cost-effective, as many companies offer discounts when combining multiple cars under one policy.
What Will Happen to Your Old Car After Transferring Auto Insurance?
First and foremost, it depends on what you want to do with the car:
- If you sell your car to another person or transfer it to a family member, you may need to transfer car insurance to a new owner. Transferring the policy is usually easier than starting it from scratch.
- If you sell your car to a dealer, the responsibility for it shifts entirely to the dealer. Consequently, car insurance transfer to a new owner is no longer your concern. You must only ensure your new vehicle receives the correct registration and insurance.
- If you keep the car for yourself, it’s better to maintain insurance on it, especially if you plan to occasionally use it. If you are certain the old car won’t be used anymore, you can consider ceasing or modifying its insurance policy. In any case, you need to contact your insurer to make a legally correct decision.
Now that you know how to transfer car insurance to a new car and what will happen to your old vehicle, let’s discuss pricing.
The Cost of Transferring Car Insurance from One Car to Another
The first thing you need to know is that the transfer does not require an additional fee. However, if your premium increases, the insurer may impose an administrative fee – the difference between your old policy and the new one.
Therefore, the cost of insurance transfer to a new car will depend on the revised rate, which is determined based on the included policies, the make & model of the car, the acquisition method (cash or credit), and other factors.
Here are the average auto insurance cost expectations for 2024, according to Bankrate:
- For full coverage:
- $2,543 per year
- $212 per month
- For minimum coverage:
- $740 per year
- $62 per month
However, it’s essential to consider that insurance prices for a new car may vary depending on your state and specific insurance agency.
Here are the major auto insurance companies in the U.S., according to Forbes Advisor:
Source: Forbes Advisor
These companies offer quite advantageous and affordable insurance services:
|Average annual full coverage premium
That said, the insurance premiums can vary significantly depending on your driving experience, driving history, new car’s make & model, and more.
How Long Does It Take to Transfer Insurance to Another Car?
It doesn’t take long to transfer insurance to a new car, usually around a few days. Simply provide the necessary information and wait for written confirmation of a successful transfer.
Some insurers may offer you the option to transfer insurance using their app or website. This way, you save additional time by avoiding a trip to the agency office.
Note that each insurance company provides a grace period – the time given to you to initiate the coverage transfer to the purchased car. For example, Progressive and Allstate transfer insurance periods are 30 days, whereas State Farm provides a 14-day grace period.
What To Consider When You Transfer Insurance to a New Car
To get coverage that fully aligns with your situation and needs, pay attention to the following:
|Information about the new car
|Gather all data that may interest the insurer. Find out about additional features or modifications to provide complete information upon the agent’s request
|Remember that driving without insurance is illegal. Try changing your car on an insurance policy as quickly as possible to avoid trouble.
|Financing the Car
|If you are buying a car on credit, consider adding gap insurance. This way, you can cover the difference between the car’s value and the amount owed in case of loss or severe damage.
|Compare the current rate with the new one and consider researching several major insurers for the best price.
|You can get different discounts with different insurers; for example, you can possibly get a discount if you add another car to insurance. Likewise, certain car modifications may reduce the premium (for example, vehicles with anti-theft devices or safety features).
With all that being said, though, the best way to know how to transfer insurance to a new car is to discuss it with your insurance company. A professional insurance company will make sure you avoid coverage gaps when transitioning from one car to another and choose the most advantageous insurance option.
Frequently Asked Questions
How long do you have to transfer insurance to a new car?
The timeframes for transferring insurance to a new car can vary depending on the insurance company or state. It’s usually recommended to change a car on insurance policy within a few days (up to a week) after purchasing it.
What happens if I don’t transfer my car insurance?
Transferable car insurance guarantees proper and continuous protection against unforeseen situations. If you fail to transfer your insurance to the new car on time, you risk driving without the necessary coverage, which can lead to financial expenses and liability in the event of an accident.
How to transfer car insurance to a new owner
To transfer car insurance to another person, both parties need to contact the insurance company. Typically, the new owner must provide personal information and details about the new car. The insurance company will handle the process, but it’s essential to coordinate all nuances of transferring car insurance to another person with the agent before changing ownership.
How long is the grace period for obtaining insurance for a new car?
Most insurance agencies provide a grace period of 7 to 30 days. However, it’s advisable not to delay the transfer to avoid the risk of getting into an unpleasant situation while driving without car insurance.
Consult with your insurance provider to learn how you can transfer your car insurance to a new car and how fast it can be done.
How to change a car insurance name
You can initiate a car insurance name change only by contacting your insurance company. In this case, you must provide information such as the policy number and other legal documentation requested by your insurer.
Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to American REIA. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At American REIA, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.