How to Transfer Car Insurance to a New Car: Step-by-Step Guide

Transferring insurance to a new car is simple. Call your insurer or update your policy online, providing details like the VIN, make, model and year. Since premiums depend on your vehicle's value and type, you'll need a new quote. Use this opportunity to reevaluate your coverage options. If your new car is more valuable, consider increasing your limits to avoid out-of-pocket repair costs.

Your car insurance rates typically change when you transfer coverage to a new car, but there's no fee for the transfer itself. Whether your premium goes up or down depends on several factors about your new vehicle.

Your rates increase when your new car:

• Is worth more than your previous vehicle
• Has a higher theft rate in insurance databases
• Lacks advanced safety features
• Requires more expensive repairs

Your rates may decrease if your new car:

• Has better safety ratings and features
• Is less expensive to repair
• Has lower theft rates
• Qualifies for new car discounts.

Most insurers don't charge a fee for transferring your policy to a new car, though leading car insurance companies vary in their grace periods and transfer requirements. If the rate increase is significant, you can shop around with other insurers before finalizing the transfer.

You have three options when buying a new car, and choosing the right approach depends on your situation:

Most insurers give you 7 to 30 days to transfer your existing insurance to a new car, depending on your state and provider. During this grace period, your old policy may temporarily cover the new vehicle. However, coverage may be limited, so it’s best to inform your insurer as soon as possible. Delaying the update could leave you underinsured or without coverage in the event of an accident. Always confirm the timeline with your insurer.

These mistakes are easy to make when you're excited about your new car, but they can be costly:

Mistake: Assuming you're automatically covered for 30 days

Reality: Grace periods vary by insurer (seven to 30 days), and some states require proof of insurance before registration

Solution: Call your insurer before finalizing your purchase, ideally while you're at the dealership. Check your state's minimum requirements before buying.

Mistake: Keeping the same coverage limits for a more expensive car

Reality: Your liability limits should match your assets, and comprehensive/collision deductibles affect your out-of-pocket costs

Solution: Review your coverage needs each time you get a new car, especially if it's worth significantly more than your previous vehicle.

Mistake: Not adding new drivers or forgetting to update driver information

Reality: Most insurers require all household members to be listed, and unlisted drivers may not be covered

Solution: Learn about adding drivers to your insurance when household situations change.

The coverage you need depends on whether you own, finance or lease your car:

• If you own the car outright and aren't financing it, you can cover it with your state-required coverage.
• If you're financing your vehicle, your lender will likely require full coverage insurance. If your current policy includes only liability, update it to include collision and comprehensive insurance to avoid violating your loan agreement.
• If you're leasing a car, you must get your own coverage. Some lessors may require gap insurance.

The table below shows the most appropriate insurance type for each situation.

Car insurance laws vary by state, and minimum requirements differ depending on where you live. Most states require only minimum coverage; your insurance won't cover repair costs if your vehicle is damaged.

Consider increasing your coverage limits, especially if you’ve purchased a high-value vehicle. A full coverage policy with comprehensive and collision insurance may be a better choice to avoid large out-of-pocket expenses.

The average cost to insure a new car is $1,895 annually for full coverage, according to MoneyGeek's analysis of major insurers. However, your actual premium depends on your specific vehicle and situation.

Most insurers don't charge a fee for transferring your policy to a new car. You'll simply pay the difference between your old and new premiums. If your new rate is higher, insurers offer flexible payment options: you can pay the difference upfront, spread the additional cost across remaining policy months, or adjust your monthly payment going forward.

When estimating the cost of transferring car insurance, several factors play a role, including your car's make and model, coverage level, your location's risk level and any additional fees. The table below lets you adjust for your car's make, model, age and desired coverage to get an estimate.

Car insurance companies consider several factors when calculating premiums. Comparing rates helps you find the best policy for your needs. MoneyGeek's calculator provides personalized quotes from multiple providers based on basic information, giving you an accurate estimate of your car insurance costs.

While you have seven to 30 days to update your policy, consider rental car insurance if you need temporary coverage during the transfer process, but this varies by company:

Transferring car insurance to a new car is straightforward, but timing and preparation make the difference between a smooth process and potential headaches. Contact your insurer with your new vehicle details, reassess your coverage needs and get written confirmation before driving.

If your rates increase significantly, don't hesitate to shop around with cheaper car insurance companies. You might find better coverage at a lower price with a different insurer. The key is ensuring you never drive without proper financial protection, even for a single day.

You can transfer insurance from one car to another when you buy a new vehicle. Here are the most common questions about how this process works.

Our Research Approach
Switching insurance to a new car shouldn't cost you more than necessary, but many drivers don't know what fees to expect or how to avoid them. We researched the actual costs and processes from major insurers to help you understand what you'll pay and how to minimize transfer expenses.

Data Sources and Analysis
We gathered transfer fee information directly from insurance company websites and customer service departments to provide accurate, current pricing. Our research focused on the most common scenarios drivers face when adding or switching vehicles on their policies.

Coverage Context
Since transfer processes vary significantly based on your coverage type, we examined both minimum and full coverage scenarios. Full coverage policies (liability plus comprehensive and collision) often have different transfer requirements than liability-only policies, especially for financed vehicles.

Expert Consultation
Our findings incorporate insights from over 700 financial and insurance experts from leading institutions. This expert input helps us explain what insurance companies charge, why specific fees exist and how you can navigate the process more effectively.

Editorial Standards
Our editorial team includes professional writers and editors with extensive experience in personal finance and insurance. We fact-check all information through multiple sources and conduct quality assurance reviews to ensure accuracy. When referencing costs or processes, we trace back to primary sources like insurer websites and state insurance department requirements rather than relying on secondary reports.

Practical Application
This research addresses the real-world scenarios drivers encounter: trading in vehicles, buying new cars, switching between family members' policies and handling financed versus owned vehicles. We focus on actionable information that helps you make informed decisions about timing your transfer and understanding associated costs.