Last Updated on December 12, 2025

“Drive away insurance” is a common name for short-term coverage that lets you legally drive a newly purchased vehicle off the lot—whether that coverage comes from your existing auto policy, a temporary policy you buy, or (less commonly) a dealership-arranged option.

If you’re buying a car from a dealership, they typically require proof of insurance before letting you drive away a new vehicle. That’s where “drive away insurance” comes in: it’s the coverage that bridges the gap between purchase and your long-term policy setup.

Below is what drive away insurance means in practice, what it usually covers, how to get it quickly, and what to watch out for.

Key Takeaways

• “Drive away insurance” usually means the coverage that lets you legally drive a newly purchased car off the lot—often through your existing policy’s new-car grace period.
• If you don’t already have insurance, you may need temporary car insurance so your new vehicle isn’t uninsured.
• Dealership-arranged “drive away” coverage can be convenient but may be limited or expensive—always confirm what it covers.
• Before pickup, confirm coverage is active (effective date/time) and bring proof of insurance to avoid delivery delays.

What Is Drive Away Insurance?

Drive away insurance is essentially a form of temporary car insurance meant to cover you right after you buy a car—especially for the first trip home and the first few days of ownership.

In many cases, you may not need a separate “drive away” policy at all. If you already have auto insurance, your policy may provide temporary coverage for a newly purchased vehicle for a limited time—as long as you notify the insurer within the required window. That window varies by company and situation, but it’s often described as a grace period for adding a new vehicle to your policy. (More here: grace period for getting insurance on a new car.)

If you don’t have an active policy, or if your current policy won’t extend to the new purchase, then you may need to buy separate short-term coverage so your new car isn’t uninsured.

Some dealerships also advertise “drive away” coverage. This may be a dealership-arranged temporary option (or guidance to get coverage quickly), but it’s not always available and terms vary widely. (Related: do car dealerships offer temporary insurance?)

Why Do I Need Drive Away Insurance?

Because driving without coverage can expose you to huge financial risk. Even a short trip home can turn into an expensive nightmare if you’re in a crash and you’re uninsured. (See: accident without insurance.)

Dealerships also protect themselves: most won’t let you take delivery of the vehicle until you show proof of insurance. If you’re financing, the lender may also require certain coverages before you can drive away.

How Drive Away Insurance Works

There are three common ways people get “drive away” coverage:

1) Your existing auto policy temporarily covers the new vehicle

If you already have insurance, your policy may extend coverage to a newly purchased car for a limited time while you report the purchase and add the vehicle. This is often the easiest path: you buy the car, drive it home, then contact your insurer to update the policy details.

Coverage rules vary (and can depend on whether the new car replaces your old one or is an additional vehicle), so it’s smart to verify before pickup—especially if you’re switching vehicles, changing drivers, or buying something very different (like a sports car or luxury vehicle).

2) A short-term / temporary policy you buy yourself

If you don’t have an active policy—or you want coverage while you shop—temporary insurance can fill the gap. Some drivers look for coverage sold as a daily rate for car insurance, but availability and terms vary by state and insurer. The key point is that the policy must be valid, active, and meet your state’s minimums before you drive.

How long you keep short-term coverage depends on your situation. Ideally, it’s just long enough to activate your long-term policy and avoid any lapse. (Remember: it’s illegal to drive without valid insurance in nearly all situations.)

3) Dealership-arranged “drive away” coverage

Some dealerships offer or arrange a short window of coverage so you can leave with the vehicle. This may last a few days while you finalize your own policy. It can be convenient—but it may be expensive or limited, and it might not be the best long-term option.

What Does Drive Away Insurance Cover?

What it covers depends on where the coverage comes from. In general, “drive away” coverage may include:

• Liability coverage (what your state typically requires)
• Collision coverage (often required if you’re financing or leasing)
• Comprehensive coverage (often required if you’re financing or leasing)
• Any other minimum required car insurance coverages in your state

Important: Not all “drive away” arrangements are full coverage. Some are limited to liability only. Others may cover only a narrow time period or specific use (for example, only the trip home). Always confirm what coverages, limits, and deductibles are included.

What to Do Before You Pick Up the Car

To avoid delays at the dealership and prevent accidental gaps in coverage:

• Call your insurer before pickup and ask what’s needed to add the new car (VIN is best).
• Ask what coverage the lender requires (if you’re financing/leasing, full coverage is common).
• Get proof of insurance (digital ID card or binder) to bring to the dealership.
• Verify the effective date and time so coverage is active before you drive off the lot.

Drive Away Insurance for Commercial Businesses

Most people use “drive away insurance” to mean short-term coverage for a newly purchased personal vehicle. But the phrase can also refer to specialized policies for businesses that move vehicles as part of their operations (like repossession, transport, or certain industrial uses).

This version of “drive away” coverage is a type of commercial insurance and is separate from the personal coverage most drivers need when they buy a car.

FAQs on Drive Away Insurance

Final Word on Drive Away Insurance

Drive away insurance is simply short-term coverage that lets you legally and safely drive a newly purchased vehicle—often by extending your existing policy to the new car, or by using temporary car insurance until your long-term policy is active.

If you want the smoothest pickup experience, arrange coverage before you arrive at the dealership, confirm what your policy covers, and make sure your proof of insurance is ready to show.