Drive away insurance in 2023. Explain drive away insurance.
Drive away insurance
Buying a new car and taking it home is an exciting event. With that buzz comes the practical task of sorting out your insurance.
For such cases, it’s important to know what drive away insurance is and if you need it.
If your new car is uninsured, you could be exposed to significant risk without car insurance or temporary drive away insurance.
In this guide to drive away insurance, we will examine all there is to know about this type of coverage.
By the end of this guide to drive away insurance, you will know how it works and what it covers.
Read on to find out more about drive away car insurance.
Table of contents
- What is drive away insurance?
- How does drive away insurance work?
- How does dealership drive away insurance work?
- Drive away insurance coverage
- Who else needs drive away insurance?
- Drive away insurance FAQ
- Drive away insurance cost
What is drive away insurance?
Drive away insurance is a temporary car insurance.
In most cases, drive away insurance covers a new car owner when driving their new vehicle from the dealership to their garage.
In other words, this special type of policy allows you to “drive away” from where you purchased your new vehicle.
However, if you already have car insurance (that covers new vehicles), that will temporarily cover your new purchase.
Drivers typically have a grace period of between 7 and 30 days for notifying their insurer of new purchases.
In this scenario, your current insurance policy should temporarily cover you until your insurer is notified about your new vehicle. You can then drive your new vehicle home and notify your insurer to adjust your policy.
The second scenario - if you don’t have car insurance - or if your car insurance policy doesn’t cover new vehicles, then you’ll need to purchase drive away insurance.
Drive away insurance can provide you with temporary coverage between the place you purchased the vehicle and the place you will drive to park.
How does drive away insurance work?
Short-term car insurance for new vehicles is offered by most insurers. It’s a necessary option, and drive away car insurance is ideal for short-term situations.
How does drive away insurance work, and how can you get it?
As the insured, you will typically pay a daily rate, and it’s possible to buy a temporary car insurance policy for up to 28 days at once.
If you don’t have a car insurance policy but have bought a new car, you can buy short-term drive away insurance while you shop around for auto insurance.
You can then legally drive your new car before purchasing an auto insurance policy.
You may also be offered short-term car insurance or temporary drive away insurance from the dealership you purchase your car.
How does dealership drive away insurance work?
When buying a new vehicle, you’ll need a car insurance policy in place to drive it out of the dealership.
As mentioned above, many car dealerships can offer you drive away car insurance. This is an easy and convenient way for drivers to cover their new vehicle.
Typically, drive away insurance from dealerships last anywhere between 5 to 10 days. It’s common to find 5 day drive away insurance or 7 day drive away insurance.
Both options above provide enough short-term protection until you secure a permanent policy. However, dealerships’ drive away insurance is usually inflexible and costly. You might have to pay for cover you don’t want.
It can cost hundreds for a few days of insurance coverage, whereas you could find cheap drive away insurance elsewhere.
Because of this, it’s worth remembering you might need adequate coverage before you pick up your new car, or check your dealership’s terms. Some dealership’s may require you to buy drive away insurance from them before they let you leave.
If you want to avoid that scenario, make sure you’re adequately covered with temporary insurance from another provider.
Drive away insurance coverage
As covered in this guide, drive away insurance provides temporary protection for your vehicle with benefits much like any other auto insurance policy.
You get collision coverage, liability coverage, and comprehensive coverage for your new vehicle.
However, some of these policies only cover the journey you’ll make from your dealership to your garage.
For another example, if you have a car insurance policy that provides temporary coverage, you may find it only covers your first trip. After which, you need to alert your insurer of your new vehicle.
According to the drive away insurance you have, here’s what it may cover:
Drive away insurance from your current insurer
Many car insurance policies provide drive away insurance for new vehicles.
If you already have a policy for your old vehicle, you might find it extends to cover drive away insurance on your new vehicle.
However, this coverage varies between insurers. Some insurers only cover one journey (the drive from the dealership to your home). In contrast, others extend complete coverage to the new vehicle (usually up to 10 days) before you need to inform the insurer about the new purchase.
Drive away insurance from dealer
If you buy your temporary drive away insurance from your dealership, you will likely get full coverage for a specific period (typically up to 10 days).
You are typically given complete protection for your vehicle for that timeframe, and this insurance works just like ordinary car insurance.
Short-term or temporary car insurance
If you purchase drive away insurance through a temporary or short-term car insurance company, you will likely get full coverage car insurance for a specific timeframe.
You will be able to legally drive your new vehicle anywhere and have all of the benefits of a standard car insurance policy.
Car insurance coverages vary widely. Verifying coverage with the insurance company or reading your current car insurance documentation is advisable.
Who else needs drive away insurance?
Not only does drive away coverage suit new vehicle owners, but it is also useful for multiple types of businesses.
Further to that, new vehicle owners who purchase their cars from private sellers will require temporary insurance.
Here we will cover both scenarios.
Drive away insurance for commercial businesses
Commercial businesses such as repos may need it if they do voluntary car repossessions.
For example, suppose someone’s car is taken away voluntarily (i.e., they agree to it on the spot). In that case, the business representative can get into the driver’s seat and take the vehicle away.
In most cases, rather than using a tow truck that had to be brought to the scene, driving the car that needs to be repossessed makes more sense.
Those drivers still need insurance. That’s where drive away coverage comes in handy, as it provides coverage for the risks they face on the job.
Drive away insurance is also useful for businesses or contractors that move heavy machinery.
They are able to drive this heavy machinery, and it will be road-legal to do so, but that requires a commercial driver’s license.
Many trucking companies send a driver to drive the vehicle that needs to be moved, as that’s easier and faster than trying to haul it.
This is a common occurrence with aid efforts for natural disasters. There usually aren’t many drivers with commercial driver’s licenses on standby, so aid organizations need to hire drivers to move the machinery they need at the scene to help people.
Again, it’s more efficient for the driver to drive the unit rather than drive a vehicle to haul the unit.
Purchasing from a private seller
Buying a new or old car from private sellers is a popular method for purchasing a vehicle.
Purchasing used cars from reseller sites has become a growing trend in recent years. It’s usually not possible for these private sellers to offer any car insurance.
As a customer to a private salesman, you may not know the car’s history. Drive away car insurance could prove necessary in case your used car breaksdown.
Whether you buy a new vehicle from a car dealer or a private seller, you need car insurance to start driving.
Takeaways: drive away insurance
Drive away insurance is an essential option if you’ve bought a new vehicle and need to start driving it but don’t have your car insurance sorted out yet.
You need to get temporary cover if:
- You’re in a rush to collect a car you purchased from a private seller.
- Your current policy hasn’t been transferred over to your new car yet.
- You want some time to shop for the best deal on annual car insurance.
Some drive away insurance policies only cover your vehicle for one journey, i.e, from the dealership to your home.
Other drive away insurance policies give you comprehensive cover (just like a standard car insurance policy), typically between 1 to 10 days.
You can buy drive away insurance from car dealerships at a higher price than most insurers.
If you have car insurance but need to buy a new car, you should contact your insurer to find out if you already have drive away coverage on new vehicles.
There is also the option to shop around for drive away insurance from local short-term car insurance companies.
Drive away insurance FAQ
How long will I need drive away insurance?
This can be decided when you purchase drive away insurance. It’s usually flexible, so you only pay for what you need.
As a rule, your drive away insurance should cover you until the same day that your new insurance begins.
Do I really need drive away insurance?
Yes, it’s essential to have temporary car insurance if you don’t have full coverage. It’s not unheard of to crash a new vehicle while driving home from a dealership.
You might have just spent $40,000 on a new vehicle before you crashed it without insurance.
That’s what makes drive away insurance a lifesaver. That’s also why dealerships require proof of insurance before you leave with your new car. It allows you to safely and legally drive your new vehicle home.
Can I drive my new car home without tax?
Driving a vehicle without tax is illegal, so it’s essential to have your tax sorted before you pick up your car.
However, if you’re buying a new vehicle from a car dealership, they should sort out the tax for you. So all you need to organize is your car insurance.
Take note, if you’re buying a used vehicle from a private seller, the road tax will not be transferred from the previous owner to you. You need to tax your new car in your name before driving it home.
Drive away insurance cost
Driving a car without insurance is risky, even if you’re only traveling a short distance.
Not only are you putting yourself and other drivers at risk, but recovering vehicles and paying fines can be costly if the police catch you.
For many new drivers looking for car insurance deals, getting temporary insurance doesn’t only save time but also saves you money. You can get relatively cheap drive away insurance in a matter of minutes.
Drive away car insurance could cost you as little as $25 to $100 per day, depending on the vehicle’s value, where you purchase the policy, your driving record, and more.
Like all insurance policies and car insurance policies alike, the overall cost of your drive away insurance policy depends on several factors.
These deciding factors include the car you need to insure to details such as your occupation. The duration of your policy will also affect the price.
The exact price you pay for drive away insurance will vary depending on your situation.