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Insurance When Test Driving a Used Car

The lowdown...
  • If you’re buying a used car, you need to be prepared to finance the purchase and insure the vehicle
  • You don’t legally have to have liability or physical damage insurance when you test drive but having it can help
  • The person or entity that owns the vehicle must insure it while it’s being test driven so there’s protection
  • As you’re test driving a vehicle, you’ll be covered as a permissive user under personal and commercial policies
  • You need to start a policy on the car when you sign paperwork that transfers ownership to you

You have to test drive a car before you commit to buying it. Getting behind the wheel of the car and seeing how it operates is the only way to spot problems that you might not be able to see with your two eyes.

You may not own the car, but whenever you drive a vehicle there’s a chance that you’ll have an accident.

To really assess a car’s mechanical condition you have to drive on highways and freeways. This means that you could have a minor accident or, potentially, an accident at higher speeds.

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Verifying that you’re insured to operate the car before the test drive is a must. Here’s what you should do to ensure you won’t face any financially damaging test drive lawsuits:

Do you have to have insurance when you’re test driving a car?


No dealership can deny you the opportunity to test drive cars in their lot if you don’t have insurance in place. You do, however, have to provide your valid driver’s license so that you can show that you’re legally allowed to drive.

It’s not your duty to insure a car that you don’t own.

You’re not obligated to insure vehicles listed for sale. You’re also not allowed to insure the car because you don’t have a financial interest in it.

That doesn’t mean that you should jump in any car without verifying that it’s insured.

When you’re shopping around at a dealership, the dealer has to maintain liability insurance on their lot of cars to keep their dealer license. That means the dealer will have a general liability policy in place.

Private sellers also have to insure cars up until they change the registration status or they sign the car over to someone else.

If you want to test out a car, it has to have a minimum amount of insurance as required under the state law.

There aren’t any exceptions to the rule for cars that are for sale so don’t assume that you can jump into just any car without asking about its insurance status.

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What are the consequences for testing out an uninsured car?

If you don’t ask about insurance, it could cost you. It’s the owner’s legal duty to insure the car but you also could be asked to answer to the letter of the law if you drive an uninsured car that you don’t own.

Here are some of the consequences that you must be aware of:

  • If you’re pulled over, both you and the vehicle owner could be cited for driving an uninsured motor vehicle
  • In some states, uninsured cars must be towed and impounded when law enforcement pulls you over for no insurance. You could be left stranded during your test drive
  • If you have a loss and the victim claims you’re negligent, you could be forced to defend yourself and be┬ácourt-ordered to pay damages

How can you verify a car is insured?


If you’re at a commercial dealership, you can verify there’s a general liability policy by asking to see a copy of it.

Most consumers have to sign a form before they test drive a car and it will say where the insurance is through on that liability form.

If you’re test driving a car that’s for sale by a private owner, you’ll have to take a few more steps. You could just ask to see the proof of insurance, but that doesn’t mean that the evidence is valid.

The most effective way to verify that there’s coverage in place is to ask the owner to call their agent in front of you.

If you don’t want to sound like you don’t trust them, you can just ask them to call and see if you’ll be covered to test drive the car.

If the car is insured, will it cover you if there’s an accident?

If you’ve verified from a credible source, then you should feel comfortable test driving the car without having to pay the price. That’s because general liability policies protect the dealership when someone is test driving.

On the other side, personal car insurance policies protect the vehicle owner when someone is given permission to drive the car and there’s an accident.

Can the vehicle owner come after you for damages?


If you get into an accident, you’re not completely off of the hook for anything that happens during your test drive.

The liability portion of the primary policy will protect the owner but that doesn’t mean that you’re protected from being held liable for damages that you’re negligent for.

When an accident is investigated and you’re liable for the events that led up to the collision, there is a possibility that the owner could come after you and ask for you to pay for the car repairs.

The owner could sue you, but only if you sign something saying you agree to pay for damages resulting from your test drive.

How does your insurance protect you?

If you already have insurance in your name, you do have some protection during your test drive. For liability-only policies, your coverage will pay when a victim sues both you and the car owner.

The policy may also pay if the primary insurer goes through the process of subrogation and tries to collect from you. When you have physical damage coverage, it may help you pay to repair the car if you’re being sued.

You don’t want your mission to find a new car to turn into a disaster that lands you in financial turmoil. The best thing to do is verify that you have protection.

If you don’t yet have insurance in place, price the cost of insurance online and get the application ready for the moment that you sign a contract. Enter your zip code below to compare rates for auto insurance today.

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