Before you read
- 1
Lenders and lessors often set minimum coverage and maximum deductibles, so ask them early.
- 2
You usually need proof of insurance at the time you take delivery, so line it up first.
- 3
Selling or trading in a car has its own checklist, from cancelling the right policy to keeping a record.
What the lender or lessor will ask for
If a car is financed or leased, the contract often requires collision and comprehensive coverage and caps the deductible. The lender or leasing company may be listed on the policy as a lienholder or loss payee.
Plan the day you take delivery
Dealers and sellers generally want proof of insurance before handing over keys. Ask your insurer how to add a new vehicle and when coverage starts, and keep the confirmation where you can find it.
A gap to ask about
If a car is totaled, the insurer generally pays its actual cash value, which can be less than what is still owed on a loan. Some people look at optional gap coverage for that situation. Ask about what it covers and what it does not.
Used cars and private sales
Check the title and a vehicle history report, and make sure the car is insured before it leaves the seller’s driveway. Rules for registration and temporary tags differ by state.
When you sell or trade in
Before cancelling coverage on a car you have sold, confirm the sale is complete and the title has changed hands. Keep the bill of sale and ask your insurer how to remove the vehicle and handle any unused premium.
General information only. Clutchara is not an insurance company, agency, or broker, and this is not insurance, legal, or financial advice. Details vary by state and by policy; check with your own insurer, agent, or state insurance department. Updated October 30, 2026.