The short answer is no, you don't need car insurance to test drive a car at a dealership, but there are a few good reasons you may want to have insurance in place. This is especially true if you are considering buying a car from a privates seller.
Let's walk through some scenarios based on the questions our customers ask us.
Do I need to have my own insurance to test drive a car at a dealership?
In short, no. The dealership's policy should cover you and the vehicle while you are test driving. You should ask, though, so you understand the coverage.
We do hear sometimes hear that a dealership wants proof of insurance of personal insurance coverage before a customer can test drive one of their cars. This is usually the way they have chosen to do business, rather than an actual insurance requirement.
Test drive the car of your dreams.
If you already own a car, you can just show them your dec page. If you don't own a car and you want to get some insurance coverage in place, you should get a non owner auto policy. Non owner auto policies are much cheaper than regular car insurance and cover your liability if you are responsible for causing an injury or damage to another car in a crash. Check out our guide to non owner car insurance to learn more.
Just remember that your policy - regardless of whether it is owned or non owned auto - is unlikely to cover damage to the car you are test driving. The dealership should have coverage on their own vehicles, but check before you get behind the wheel.
Customers have also told us that their dealership wants them to sign a document accepting liability for any accidents or damage before test driving. Be careful here. We can't advise you whether you should sign any particular document, but read carefully and consider what will happen if you get in an accident. Even if you have your own car insurance, it probably will not pay for damage to the car you are test driving - that's usually covered on the dealership's insurance. Talk to your insurance company or agent to be sure of your coverage.
Do I need to have my own insurance to test drive a private seller's car?
If you test drive a privately owned car, you should be covered by the seller's car insurance. However, you should make sure you understand if they have valid insurance in force, how much liability insurance they have, and whether their policy covers damage to their vehicle in a crash, aka collision coverage.
If you already have a car insurance policy of your own, it should cover your liability if you are responsible for a crash, but it won't cover the seller's vehicle. You'll want to make very sure the seller has coverage on their vehicle, or you could end up with them suing you to pay for fixing their car if you get in a crash.
If you don't have a car insurance policy of your own, you may want to consider a non owner auto policy, particularly when you are test driving cars owned by private sellers. Non owner car insurance will provide you with liability coverage while you test drive, so you don't need to worry about whether the seller has enough liability insurance on their policy, or whether they've paid their insurance bill.
Note that like owned auto policies, non owner auto policies do not cover damage to the vehicle you are test driving. That kind of coverage can usually only be purchased car owner, so check to make sure they have coverage before you end up financially responsible for fixing damage to their car.
Even if I don't need car insurance to test drive a car, are there reasons I might want it?
There are two good reasons to get car insurance before you start looking for a new car: building your insurance history, and making sure you have enough liability protection when you test drive.
Why is insurance history important? Insurance companies give big discounts to car owners who have had prior insurance, sometimes as much as 30%. Six months of prior insurance is the usual threshold for the discount, and sometimes there are bigger discounts for a longer history. If you don't have a car, building your insurance history with a non owner auto insurance policy may cost you a whole lot less in the long term. Read our article about insurance history for more information.
Having enough liability protection is also important. This is the insurance coverage that pays for other people's injuries or property damage if you are responsible for a crash. Medical care is, obviously, super expensive, and you can be sued for treatment and lost wages. You may not think you have a lot of assets for someone to collect from, but they can usually go after your future earnings, too.
If you are test driving a private seller's car and covered by their insurance, they may have as little as $15,000 of liability coverage, depending on the state. That won't cover too many emergency medical bills, unfortunately. You can usually buy auto insurance liability coverage up to $100,000 or $250,000 pretty easily, and you can even add more with an umbrella policy. (And no, the costs don't scale with the amount of coverage - higher limits should be moderately more expensive than minimum limits, not many times as much!)
So, in short, you don't need your own auto insurance to test drive a car, but you do need to be covered by someone's policy - the dealership's, the car owner's, or your own. A little caution up front is always a good idea!
Surround makes insurance easy. Check out our detailed non owner auto insurance guide.