Do you need insurance before buying a used car?

Insuring a used car: What you need to know

If you're shopping for a used car, be prepared to take the steps necessary to insure it. Once you've settled on a few contenders, or if you have made your choice, you can get car insurance quotes by providing the vehicle identification number, or the make and model, to insurance companies. That way, you'll know what you can expect to pay.

Insurance companies will typically transfer coverage from a car you already own -- or traded in -- to the "new" one for a limited amount of time. How long the extended coverage is offered depends on your insurance company's rules and state laws, but usually ranges from a few days to a month.

If you don't already have car insurance, you should have a policy in place before you pick up your car. Remember that all drivers must meet their state minimum liability requirements. This coverage pays for damage you do to others' cars and property, but does not cover damage to your car. For that, you need comprehensive insurance and collision coverage.

Comprehensive insurance pays for damage to your car due to flooding, fire, vandalism and hail, and pays out the actual cash value of your car if it's stolen. Collision covers damage to your car from accidents when you hit, or are hit, by another vehicle or object. If your car is less than 10 years old, or worth more than $3,000, it's wise to get these optional coverages.

If you have a loan or lease on your car, you may be required to purchase comprehensive and collision. If that's the case, be sure to notify your insurer if you are transferring your existing coverage and only carry liability insurance.  If you never notify the company, or do so after the time period mandated by your insurer, your car won't be covered.