It will depend upon your state’s laws, but in most states, if your car is registered, you will need to keep auto insurance or some other type of financial responsibility.

Also if you have a lien holder on your vehicle (due to owing on a loan or lease), they will require you not only to have the state minimum liability coverages but also physical damage coverages of collision and comprehensive.

Key Highlights
  • Most states need all motor vehicles to be registered and to have auto insurance while they are registered. 
  • If the vehicle is undrivable, you might be able to obtain special status from the DMV; however, you would need to verify with your state’s Department of Motor Vehicles to determine what the law allows in your state. 
  • Do not discontinue insurance without first contacting the DMV and perhaps returning your license plates and registration. 
  • You must also find out from the DMV where you can park this car if you do not intend to keep registration or insurance on a vehicle you do not drive. 

Most states require all motor vehicles to be registered; while a car is registered, it must carry auto insurance. However, some states allow you to get special status for a vehicle if it is not going to be driven. So if the car is inoperable you may be able to get special status on it from the DMV, you would have to check with your local state Department of Motor Vehicles though to find out what your state’s laws allow.

State laws for inoperable vehicles vary

For example, California has guidelines for inoperable cars. California law requires motor vehicles to have current registration if they are driven, towed, stored, parked on public roads or highways or parked in an off-street public parking facility at any time during the registration period.

If you have an inoperable vehicle in California and it will not be in any of the places listed above, you can apply for non-operational status on the car and pay a planned non-operation (PNO) fee. Once this status is placed on a vehicle’s record, it remains until you decide to operate the car and pay registration renewal fees.

Another example is in Connecticut. In Connecticut, if you do not want to pay insurance on a car that is inoperable or being stored, you must turn in your plates to the DMV and request that they be put on “hold.” At that time, you may drop insurance coverage on the vehicle. When you are going to drive the car once again, you would need to inform the CT DMV and get insurance on the vehicle.

Check with your state’s Department of Motor Vehicles to determine what state laws allow for in your situation. Do not take off insurance without contacting your DMV and likely turning in your registration and plates. If you do take off insurance without turning in your plates and registration, then many states will cite you and penalize you for a lapse in insurance.

In South Carolina, if your liability insurance is canceled or expired, you must return your vehicle’s license plate and registration to DMV or reinstate your coverage. Otherwise, your driver’s license and vehicle plate will be suspended and you will be subject to a reinstatement fee of $200 and a $5 penalty for each day the vehicle was uninsured or plate(s) was not turned in. The maximum penalty for the first offense is $400 per vehicle.

If you do not plan to keep registration or insurance on a vehicle you do not drive, you will also need to find out from the DMV where you can park this car. You will need to have it in storage, your own garage or a private driveway since unregistered and uninsured cars are not usually allowed even parked on public roadways.

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Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.