If you are going to buy a car, you are going to need car insurance.  Some people think that there is a grace period between buying a car and getting coverage for driving; this is not true.  In most states you are required to purchase car insurance before you can legally drive your new car on public roads.  That means that when you drive your new car home, you must have an insurance policy in place.  The term grace period is usually referring to the amount of time you have before you have to pay your first premium once you have signed up for an insurance plan.

Auto insurance companies will usually grant 24-30 business days within which you can make your first payment.  After that, your policy will be cancelled and your balance sent to collectors.  It is important to do some research and compare auto insurance quotes before you buy a policy.  This way you can gage ahead of time whether or not you’ll be able to make the required payments on time by finding an auto insurance plan that fits your budget.

Certain circumstances allow for flexibility with this grace period policy.  For example, if the insured dies during the grace period, and the beneficiary cannot cover the premium, then the insurance plan will remain intact for up to 30more days without payment.  This offers a bit of protection for the beneficiary when the premium hasn’t been paid.

In most cases, however, you’ll definitely need to make the payment within the designated grace period in order to avoid consequences.  Have a balance go to collections can be a serious problem and can negatively impact your credit score for years to come.  Bad credit scores also affect future auto insurance quotes.  Typically, the worse your credit, the higher your car insurance premiums will be.

If you plan to buy a car, then you need to first buy car insurance so that you have a policy in place before you even take the car home from the lot.  In order to find the best deal available, you should look around for the best car insurance quote.  This involves a bit of research, but it is time well spent.  You can use your grace period if you need to before you pay your first premium.  Make sure you know how long the grace period is before you rely on it.