What to Know About Car Insurance When Selling Your Car
Ever wonder what happens to your car insurance when you sell your car? Or whether you need coverage to take potential buyers on test drives? Figuring out how to sell a car is no easy task, but we can help you keep things simple when it comes to the insurance part. Follow along for what you need to know about car insurance when you're selling (or have sold) your car!
Be Careful About Canceling Your Policy
Once you decide to sell your car, it can be tempting to cancel your auto insurance policy right away, especially if you plan on letting the car sit in the driveway until you find a buyer. Wanting to save money is understandable, but canceling your policy too soon could cost you in the end. Here's why:
Your state may require it
Many states require automobile insurance coverage to remain in force as long as the vehicle is registered in the state.
You want coverage for test drives
Most buyers will want to take the car for a spin to see how it feels. If your car is out on the road, it's subject to all the road's uncertainties! What if another driver doesn't see that the traffic light turned red? What if it starts hailing? And what about the worst case scenario of your car getting totaled? Life is full of unexpected events. If you hand over the keys to an uninsured vehicle, you put yourself, your vehicle, and the test driver at risk.
You could end up with a gap in coverage
Prior insurance history is one of many factors that can influence your auto insurance premium, so a gap in coverage could lead to higher premiums when you do decide to drive again in the future.
You may change your mind
Your circumstances could change, you could have difficulty finding a buyer, or maybe your other car decides to unexpectedly call it quits. Whatever the case, you may find that you need to drive your car when you least expect it and if you've already canceled your car insurance, you may have a problem! You'll need to contact your insurance company to reinstate your policy, or you could have to start from scratch with a new policy. Talk about time and hassle!
Adjust Your Policy After the Sale
It's your responsibility to insure your car until ownership of the vehicle has been officially transferred to the new owner. Once you have transferred ownership of the vehicle and notified your Department of Motor Vehicles of the sale, it's time to contact your auto insurance company to adjust your existing policy.
Your insurance company doesn't get notified when your car is sold. That's why it's up to you to request that the sold vehicle be removed from your insurance policy. Your insurance company also isn't notified when you buy a new vehicle, so it's important to contact them when you're buying a new car or truck too.
If you're a policyholder with Direct Auto & Life Insurance, you can conveniently add or remove a vehicle from your policy online, over the phone, or in-person at a Direct Auto location near you. Call 1-877-GO-DIRECT with any questions and read more about when and how to update your policy. Friendly agents are standing by to assist you!