How Do I Get Auto Insurance for a Used Car?

Do you still need auto insurance for a used car? Yes, you do, but because pre-owned models cost less than brand-new ones, the premiums usually go down, too. To insure a used car, you must purchase at least your state’s minimum required coverage before you drive it. This will keep you legal on the road and protected financially. The process involves choosing an insurance company, selecting the right coverage (liability is mandatory in most states, and other coverages are optional), and starting a policy effective once you become the car’s owner. Typically, you can arrange insurance online or over the phone in minutes. 

For example, an eight-year-old vehicle might cost about 25% less to insure than a brand-new one. Always compare quotes to get the best rate, and remember you can’t legally drive the car off the lot without proof of insurance in most cases. (Need help fast? Call Insure On The Spot at 773-202-5060 for a quick quote.)

What are the benefits of buying a used car?

A lower sticker price is the most obvious benefit, but it’s not the only one. There’s also: 

• Lower purchase price: Used cars generally cost less upfront than new cars, which can also lead to lower sales taxes and insurance premiums (since the car’s value is lower).
  
• Less depreciation: New cars lose value quickly in the first few years. A used car has already undergone this steep depreciation, so its value (and insurance replacement cost) remains more stable.
  
• Reduced fees and add-ons: Used vehicles often avoid many new car fees, such as destination charges or high dealership prep costs. You also might save on registration fees, which are based on vehicle value or age in some states.
  
• Wider negotiation room: There’s usually more room to negotiate the price on a used car. Private sellers or dealerships with used inventory may be more flexible on pricing and repairs.

Note: Even with these benefits, remember that auto insurance is required for any car you drive – new or used. So while you might save money buying the car, you’ll still need to budget for an insurance policy to protect it (and to meet legal requirements).

Is auto insurance cheaper for used cars than for new cars?

Typically, insurance for a used car is cheaper than for a brand-new car, but not always by a wide margin. The main reason used cars can cost less to insure is that they have a lower market value. This means if the car is damaged or totaled, it costs the insurer less to repair or replace it, leading to lower premiums for collision and comprehensive coverage. Also, used cars may be less attractive to thieves (depending on make/model), which can reduce theft risk in the eyes of insurers.

However, vehicle age is just one factor among many regarding insurance rates. Newer cars sometimes come with advanced safety features or anti-theft devices that can qualify for discounts or reduce the likelihood of accidents/injuries. For example, a brand-new car with automatic emergency braking and anti-theft tracking might be cheaper to insure than an older car lacking those features, even if the older car is less valuable. Insurance companies weigh the cost to repair as well – sometimes newer cars have more expensive parts or technology that raise claim costs, but older cars might lack readily available parts, which could also increase repair costs.

According to recent industry data, on average, auto insurance rates drop about 3% for each year your vehicle ages. In one comparison, a mid-range used car (about 5–6 years old) was roughly $18 per month cheaper to insure than its brand-new counterpart. Over a year, that savings add up. Still, the difference between insuring a 3-year-old car versus a brand new car might be fairly small, especially if other factors (like your driving record or location) dominate the rate. 

Bottom line? Used cars tend to be cheaper to insure than new cars, but getting quotes for the specific vehicles you’re considering always makes sense. Don’t assume you can get a huge insurance discount just because a car is older.

What factors affect the cost of used car insurance?

Insurance premiums are personalized, so how much you will pay to insure a car will largely depend on various factors. Here are the ones you should keep in mind:

• Your location: Insurance costs can vary widely by state and even by ZIP code. Urban areas or regions with higher accident rates, theft rates, or insurance claim frequencies often have higher premiums. Your state’s insurance regulations (and minimum coverage requirements) also influence the price. For example, states that mandate additional coverages like Personal Injury Protection can raise the overall cost of a policy.
  
• State minimum requirements: Every state (except New Hampshire and certain scenarios in Mississippi) requires a minimum amount of liability insurance coverage. If you’re insuring a used car, you must at least meet these minimums. The required coverage levels (and types) in your state will set your policy’s baseline cost. Buying more than the minimum, while providing better protection, will increase the premium.
  
• The vehicle’s make, model, and year: The specific car you’re insuring has a big impact. Insurers look at the vehicle’s value, age, repair costs, safety record, and likelihood of theft. A modest used sedan will generally cost less to insure than a luxury sports car or a high-performance vehicle, even of the same age. Likewise, a car with a strong safety record and cheap replacement parts (or one that’s inexpensive to repair) will have lower premiums than one that’s expensive to fix or prone to serious damage.
  
• Your driving record: Your personal driving history plays a huge role. If you have a clean record with no accidents or violations, you’ll likely get a much better rate. On the other hand, if you have at-fault accidents or serious tickets (like DUIs), insurance for any car (used or new) will cost more. In some cases, a poor driving record might require you to obtain an SR-22 insurance filing to prove you carry insurance, which can raise your rates. (An SR-22 is a certificate your insurer files with the state to confirm you have the required insurance – often needed after suspensions or serious infractions. Insure On The Spot offers affordable SR22 insurance for drivers who need this service.)
  
• Your age and experience: Younger drivers and those with less driving experience typically face higher insurance rates. For example, a teenager insuring a used car might still pay more than a 40-year-old insuring a new car, because youth and inexperience increase risk from an insurer’s perspective. As you get older and build a safe driving record, rates generally improve.
  
• Coverage choices: The type and amount of coverage you choose for the used car will significantly affect the cost. Liability coverage (which covers damage/injuries you cause to others) is usually the cheapest and is required. If you add collision coverage (to cover damage to your car from crashes) and comprehensive coverage (to cover theft, fire, vandalism, or natural disasters), your premium will be higher. Each additional coverage (like uninsured motorist or personal injury protection) adds to the cost. You’ll need to decide what coverages are appropriate given the car’s value and your needs.
  
• Your deductible: If you include collision or comprehensive coverage, you’ll choose a deductible (the amount you pay out of pocket on a claim). A higher deductible (e.g., $1,000 instead of $250) will lower your premium because you’re taking on more of the cost risk. With a used car, some people opt for higher deductibles or even drop certain coverages to save money, but be sure you can afford that deductible in case of an accident.
  
• Credit history (in most states): In many states, insurers use your credit-based insurance score as a factor. Statistically, credit tends to correlate with insurance risk. If you have good credit, you often receive lower rates, while poor credit can increase your premium. Note that some states (like California, Massachusetts, Hawaii, and others) do not allow credit to be used in setting car insurance rates; this factor won’t apply in those states.

These factors all combine to determine your unique rate. When getting quotes to insure a used car, be prepared to provide honest information about yourself and the vehicle. 

Tip: If you’re buying a used car, getting insurance quotes before finalizing the purchase is wise. You’ll then know how the car’s characteristics (age, model, etc.) and your personal factors will translate into insurance cost, helping you budget better. Remember, you don’t need to activate the insurance policy until you own the car, but checking rates beforehand can prevent surprises.

What types of auto insurance coverage do I need for a used car?

The coverage you must have versus what you may want depends on your situation. Here are the main types of auto insurance and how they’ll relate to you if you own a used car:

• Liability Insurance: This coverage pays for other people’s property damage and injuries if you are at fault in an accident. Liability insurance is required by law in almost every state (the state sets minimum liability limits that you at least must carry). Whether your car is used or new, liability coverage is mandatory to drive legally (except in a couple of states with alternative financial responsibility options). Always carry at least the minimum, but it’s often wise to buy higher liability limits if you can – accidents can be costly and minimum limits might not cover a severe crash.
  
• Collision Coverage: Collision insurance pays to repair or replace your own car after a collision (regardless of who caused the accident). This coverage is not required by law, but if you financed your used car with a loan or you lease it, the lender or leasing company will almost certainly require you to carry collision (and comprehensive) coverage. If you own the car outright, collision insurance is optional. Consider the value of your used car: collision coverage on a very old, low-value car might not be cost-effective (for example, paying an extra premium for collision on a car worth only $2,000 may not be worthwhile, as any claim payout would be limited to that low value minus your deductible). On the other hand, if the used car is relatively new or expensive to repair, collision coverage can save you from a big out-of-pocket bill after an accident.
  
• Comprehensive Coverage: Often paired with collision, comprehensive coverage covers damage to your car from non-collision events: theft, vandalism, fire, hitting an animal, storm damage, cracked windshields, etc. Like collision, it’s usually required by lenders if your car is financed, and it’s optional if you own the car. For used cars, the same logic applies – weigh the car’s value against the cost of coverage. Comprehensive tends to be cheaper than collision and covers a wide range of risks (even a low-value car could get stolen or hail-damaged), so many drivers keep comprehensive coverage even on older vehicles while sometimes dropping collision if they want to reduce insurance costs.
  
• Personal Injury Protection (PIP): PIP (also known as no-fault insurance in some states) covers medical expenses and sometimes lost wages or other related costs for you and your passengers after an accident, regardless of who was at fault. PIP is required in certain states (especially those with no-fault insurance laws) and unavailable in others. If you are in a state that mandates PIP (or MedPay, a similar medical payments coverage), you’ll need to have it on your policy for any car you insure, used or not. If it’s optional, consider your health insurance coverage and risk tolerance – PIP can provide valuable, quick coverage of injury costs. Still, if you have good health insurance, you might opt out where it’s not required.
  
• Uninsured/Underinsured Motorist (UM/UIM): This coverage pays for your injuries (and sometimes property damage) if you’re hit by a driver with no insurance or insufficient insurance to cover your damages. UM/UIM is required in some states and optional in others. It’s generally a smart coverage to have, because many drivers carry only minimum insurance or none at all, and if they hit you, you could be stuck with medical bills or car repair bills. Insuring a used car with UM/UIM makes sure you’re protected from others’ lack of insurance.
  
• Medical Payments (MedPay): MedPay is a smaller coverage for medical expenses (usually a few thousand dollars of coverage) that’s optional in many states. It overlaps somewhat with PIP or health insurance. If you don’t have PIP available or want extra peace of mind, you could add MedPay. It’s often very inexpensive.

When deciding which coverages you need for your used car, consider both legal requirements and your financial situation. At the very least, you must have liability insurance to drive. Beyond that, if your car is newer, financed, or you couldn’t easily afford to replace it out-of-pocket, you should strongly consider carrying collision and comprehensive coverage. If your used car is older and not worth much, you might choose to skip collision/comprehensive to save money – just be aware that means you’d get no payout from your insurer if your car is damaged or totaled by things those coverages normally cover. Many drivers of older cars carry “liability-only” insurance for the cheapest policy, but make sure you’re comfortable with that risk. 

Tip: Ask your insurer for quotes with and without collision/comprehensive coverage; you can see the price difference and make an informed choice.

Finally, remember that certain coverages (like PIP, UM/UIM) might be automatically included or required depending on your state. A licensed insurance agent or an online quote tool will typically guide you through what’s mandatory. Don’t hesitate to ask questions about each coverage – a good insurer will help you tailor the policy so you’re adequately protected without paying for coverage you don’t need.

How do I get insurance for a used car?

Getting insurance for a used car is almost the same process as insuring a new one. If you’re buying a used car from a dealership, they will usually require proof of insurance before you drive off the lot. If you’re buying from a private seller, you’ll need to make sure you have an active insurance policy when you take possession of the car (even if it’s just driving it home, you need coverage as soon as you’re the owner). Here’s how to obtain auto insurance for your used vehicle:

1. Gather your information and vehicle details. You’ll need basic info to get insurance quotes. For a used car, this includes the year, make, model, and VIN (vehicle identification number) if available, plus the purchase date. You should also have your driver’s license number, and details about your driving history (violations, claims) ready to enter. If you’ve decided on a specific car, you can use that info; if you’re still shopping between a couple of models, you can get quotes for each to compare.
   
2. Get quotes from insurance companies. You can get free auto insurance quotes online (by visiting insurance company websites or using comparison tools) or by calling insurance agencies directly. It’s wise to get quotes from at least a few companies to see who offers the best price for the coverage you need. If you already have an auto insurance policy (say, on another car), you can also contact your current insurer, adding another car to your existing policy might qualify you for a multi-car discount. Insure On The Spot, for example, lets you get a quote online in minutes or by calling their agents, making it easy to find out how much it will cost to insure your used car.
   
3. Choose the right coverage and deductible. Based on the quotes and your needs, decide on the coverages for your policy. At a minimum, select the required liability coverage. Then, decide if you want to include collision and comprehensive coverages on this used car (consider factors discussed in the previous section, like the car’s value and whether it’s financed). If you opt for those coverages, choose a deductible amount (common options are $500 or $1,000). The deductible is what you pay out-of-pocket on a claim; a higher deductible means a lower premium and vice versa. Ensure the quote reflects the coverage levels you’re comfortable with – you can typically adjust liability limits, add/remove coverages, etc., and see the price change.
   
4. Finalize the policy and start coverage. Once you pick a quote that fits your budget and coverage needs, you can purchase the policy. You’ll need to provide the insurer with the final details (VIN, your personal info, payment information, etc.) to set up the policy. Importantly, set the policy start date to either immediately or the date you plan to take ownership of the car. If you’re at a dealership, you can often call the insurer on the spot or have the dealership fax your insurance company – but it’s often easier to have arranged it beforehand. Upon payment, the insurer will issue you proof of insurance (insurance ID cards). These can be digital or printed. Make sure to have this ready when you go to pick up the car.

If you already have auto insurance on another vehicle, the process can be even simpler: many insurance companies offer a grace period (often around 7 to 30 days) where a newly purchased car is automatically covered by your existing policy temporarily. This means if you trade in your car or buy an additional car, you might have immediate coverage under your current policy’s terms. However, you still must inform your insurer about the new (used) car and formally add it to your policy within that grace period. Don’t just assume your existing insurance will cover the new car indefinitely without reporting it. A quick call or online update to add the vehicle will ensure you have proper, continued coverage. If you’re replacing a car, the insurer will remove the old vehicle and add the new one (potentially adjusting the premium). If you’re adding a second car, they’ll include it and apply any multi-car discount.

It’s important to remember that you should have insurance active from the moment you become the owner of a used car. Plan ahead – get quotes and choose a policy before you complete the purchase. This way, you can simply activate the policy (or add the car to your existing insurance) on purchase day. It’s illegal in almost all states to drive without insurance or proof of financial responsibility, so don’t skip this step. The good news is that getting insured is straightforward, and insurers are used to quick turnarounds for car buyers. If in doubt, talk to an insurance agent who can walk you through the process and timing.

How can Insure On The Spot help with used car insurance?

If you’re feeling unsure about how to insure your newly bought used car, Insure On The Spot is here to make it easy and affordable. Our experts can guide you through selecting the right coverage for your situation and budget. We understand that every driver’s needs are different – you could be insuring a basic commuter car or a family SUV. Our team will help tailor a policy that meets your state’s requirements and gives you peace of mind on the road.

Insure On The Spot offers instant quotes and fast coverage for used cars. You can get a free auto insurance quote in just a few minutes, either online or by calling us directly. Many drivers appreciate the convenience of comparing options with the help of our experienced agents. We’ll explain exactly what coverages would benefit you (without any unnecessary extras), and we’ll shop among multiple insurance carriers to find you the lowest rate available. Even if you have a less-than-perfect driving record or need special filings like an SR-22, we can handle it – our team has experience with all types of cases.

By choosing Insure On The Spot, you’re also getting the support of a trusted organization that’s been helping drivers since 1986. We pride ourselves on on-the-spot service – meaning we work quickly to get you insured and on your way. Once you have your used car picked out, give us a call at 773-202-5060 or visit our website to get started. We’ll help you navigate the insurance process from start to finish, so you can drive your used car with confidence knowing you’re properly covered. Getting auto insurance for a used car doesn’t have to be overwhelming – not when you have the right partner on your side!

FAQs: Auto Insurance for Used Cars

Q: Is car insurance cheaper for used cars?
A: Generally, yes. Insurance for a used car is often cheaper than for a new car because used cars have a lower value. This means collision and comprehensive coverages (which pay to repair your car) cost less. For example, an older car might be around 20–25% cheaper to insure than a brand-new version of the same model. However, the savings aren’t guaranteed – if a used car lacks modern safety features or has high repair costs, its insurance might not be much cheaper. Other factors like your location and driving record also affect the price, so always compare quotes.

Q: Should I get full coverage on a used car?
A: It depends on your car’s value and your personal needs. “Full coverage” usually refers to having collision and comprehensive insurance in addition to the required liability coverage. If your used car is relatively valuable (or if it’s financed and the lender requires it), getting full coverage is wise to protect against damage to the car. On the other hand, if your car is old and not worth much, you might choose to carry liability insurance only to save money – just remember this means you’ll pay out of pocket to fix or replace your car if it’s damaged. Many drivers of older cars drop collision and comprehensive once the annual cost of those coverages approaches 10% or more of the car’s value. Think about how you’d handle a loss: if you can’t afford to replace the car, you should keep full coverage; if you can accept the risk of loss, liability alone could be sufficient.

Q: Do I need insurance before I drive a used car home?
A: Yes. You should have an active insurance policy that covers the used car before you drive it home (or off the lot). It’s illegal in most states to drive any car without at least liability insurance. If you’re buying from a dealership, they will usually verify you have insurance for the new purchase. If you already have an auto policy, you may have automatic temporary coverage for a newly acquired car (typically for a short grace period like up to 7–30 days, depending on your insurer). Even so, you must notify your insurance company and officially add the new car to your policy as soon as possible. If you don’t have any insurance yet, you’ll need to buy a policy effective immediately on the day of sale. The safest approach is to arrange coverage in advance (you can set the policy to start on the purchase date). This way, you can legally drive your used car right after buying it. 

Bottom line: don’t drive the car home uninsured – it’s not worth the legal and financial risk.

Q: How do I insure a used car I just bought?
A: Insuring a just-bought used car is straightforward. If you already have car insurance, contact your insurance provider and let them know you purchased another vehicle. They will add the new car to your policy (or replace your old car on the policy) and can adjust your coverages if needed. Usually this can be done over the phone or online in minutes, and you’ll receive an insurance ID card for the new car. If you don’t have existing auto insurance, you’ll need to choose an insurance company and start a new policy. You can get quotes online or by phone — you’ll need the car’s details (year, make, model, VIN) and your personal information. Once you pick a policy and pay, the insurer will issue your proof of insurance immediately. Make sure the coverage is active before you drive the car. In either case, the key steps are: get a quote, purchase a policy (or add the car to your current policy), and keep proof of insurance handy. This process is often quick – many insurers, like Insure On The Spot, can set up your insurance on the same day you buy the car.

Q: Will my current insurance cover a used car I just bought?
A: If you already have an auto insurance policy, most insurance companies provide automatic temporary coverage for a new vehicle you purchase. This means your current insurance will typically cover your newly bought used car for a short period, usually ranging from a day up to a month (the exact length varies by insurer). The coverage generally mirrors what you had on your previous vehicle. For example, if you had liability, collision, and comprehensive coverage on your existing car, those will usually extend to the new car during the grace period. 

Important: You still need to inform your insurer about the new car and formally add it to your policy within that time frame. If you miss the notification window, your coverage on the new car could lapse. Also, if you only had liability on your old car and want full coverage on the new one, you should update your policy immediately – the automatic coverage might not cover physical damage to the new car unless you had that on the old car. In summary, yes, your current insurance often gives you a cushion of coverage when you acquire a used car, but you must contact your insurance company as soon as possible to make the coverage permanent and to adjust any coverage for the new vehicle. Always check with your insurer about their specific rules so you’re not caught off guard.