Auto dealers are in the business of selling cars and not selling insurance so it's never a good idea to wait until you are sitting down to sign the loan papers to call a "recommended" agent of the dealer. The dealer most likely does not have your best interest in mind, just the kickback he will most likely get from his friend.
When you know what vehicle you want contact different car insurance companies and compare quotes away from the dealership. If you provide the vehicle VIN of your new car it makes comparison shopping even easier.
Should I contact my insurance company before going to buy the car?
Auto insurance can be rather expensive and varies greatly, depending on a variety of factors. It is generally true that the more expensive a vehicle the higher the premiums but this is not always true. Many times a vehicles even $10,000 less has lower car insurance rates. Before making a commitment to buy a car you must understand the cost to insure it. Without this number you are left with only an estimate of your total monthly financial obligation and its never any fun to learn you can't afford a car after signing loan documents.
If you intend to purchase a second hand vehicle, then make sure you are provided with an honest and accurate record of its history. Car insurance premiums may be affected if:
The car has been in any accidents
Has not been looked after correctly
Has had any features added
On the positive side, if any devices stopping theft or increasing safety have been installed, the premiums are likely to be reduced.
What happens if I drive without insurance?
In most parts of America, you are not allowed to drive without insurance. Even though different states have different ways of enforcing this rule, all drivers must be covered by a minimum of liability insurance. This means that if you cause damage or harm to another party or their property, you will be covered.
You might think that there is very little risk involved in simply driving a car from the dealership or from the previous owner's house to your place. However, if the police catch you, you will face an enormous penalty and possibly even a jail sentence, depending on where you are.
Moreover, if you do have an accident that causes any damage to someone else or their car, you will be in debt immediately. Depending on the scenario, the amount of damage done and the type of vehicle, this can mean the kind of financial catastrophe that can wreck you for years. Most dealers will not let you drive away without showing proof of insurance first as it's not worth the risk or hassle for them either.
Some drivers opt to just their exiting auto insurance company and if you already had a car that was covered, the policy can sometimes remain valid for up to thirty days on your new vehicle. However, it is imperative that you contact your insurance company to make sure that this is the case. The smallest miscommunication might mean that you are not actually covered and, if you do have an accident, this could translate to tens of thousands of dollars in payouts.
Can I secure a loan without car insurance?
If you are buying a car with a loan then you will most likely have to buy car insurance first. Most auto loan providers will not close a car loan without written evidence of an insurance policy.