When buying a new car, how do I transfer insurance?

When you buy a new car, you’ll need to insure it before hitting the road. A common question is whether to transfer your existing car insurance to the new car or cancel your policy and start fresh with a new one. The right choice depends on your needs, the terms of your policy, and the price. If you're planning on transferring your current car insurance coverage, here's what you need to know.

Will you need to purchase a new policy?

When buying a new car, you’ll need to decide whether to transfer your existing car insurance policy or purchase a new one. Ideally, it’s best to sort out your auto insurance before buying a new car.

If you already have coverage for another vehicle—like the one you’re replacing—you might not need to buy a new car insurance policy as most insurers make it easy to transfer your coverage from one vehicle to another. Because it's an easy process—no need to start a new policy—it means your car will be insured and ready to hit the road sooner.

Just make sure to let your insurance company know about your new vehicle right away so you're protected from the start. In fact, it's a good idea to reach out to your insurance company for a quote before finalizing your car purchase, so you’ll know what to expect. Many people make the mistake of checking their premiums only after they have purchased the vehicle. Once your vehicle is purchased you will be required to pay for the insurance premium no matter if it is within your budget or not. Also, just a heads-up—you can’t transfer your car insurance simply by putting your existing licence plates on your new car.

Assessing your new insurance needs

When you buy a new vehicle, chances are your car insurance needs will change—unless it's the same year, make, trim, and model as your old one. This means you’ll probably need to update your auto insurance policy because the make, model, and year of your car directly affect your insurance premium. This also means your insurance premiums will likely change, too. Unless you’re buying the exact same car, you’ll need to adjust your policy to fit your new vehicle.

It’s also a good opportunity to reassess your coverage needs. If your brand-new car is more valuable, you might need higher coverage. For example, you might want to add on collision coverage or comprehensive car coverage to make sure your vehicle is covered in case of a collision or theft, or replacement car insurance to ensure the full amount of your brand-new vehicle is covered.

The good news is you can easily request changes to your coverage when transferring your car insurance to your new car. It’s a great opportunity to make sure your policy fits your needs perfectly.

Keep in mind that there might be an administrative fee for updating your policy, and your premiums could change depending on the make and model of your new car. So don’t forget to ask about any changes to your premium or coverage options to avoid surprises later.

Transferring your existing insurance policy

Ready to switch your current car insurance policy from your old vehicle to your new one? Follow the step-by-step guide below:

1. Consider your coverage options

Your new car may require different coverage than your old car, so consider your coverage options carefully. Too little insurance can have serious financial ramifications, but too much coverage can lead to overpaying. Talk to a local insurance broker like BrokerLink for advice on how much insurance coverage to purchase for your new vehicle.

2. Research penalties for policy cancellations

Before contacting your insurance company about switching your policy, find out if there are any penalties. Some insurance companies charge cancellation fees for changing a policy before the end of the coverage period.

3. Compare auto insurance quotes from multiple insurance companies

Shopping around is key to finding a great deal on car insurance. Don’t just settle for the updated quote your current provider offers—take the time to explore your options. Using a brokerage like BrokerLink can make it easier by helping you compare quotes and find the best coverage at the best price.

4. Contact your current insurance company

After you have obtained quotes from other insurance providers and have a reasonable idea of what auto insurance for your new car could cost, contact your current insurer. Ask them for an updated quote in the event that you decide to transfer your existing insurance instead. In addition, find out if you are eligible for any discounts or other savings opportunities.

5. Make sure your old car insurance policy is cancelled

If you have decided to buy a new policy, make sure that your old car insurance policy is cancelled. Many drivers assume that their old policy is automatically cancelled after switching their car insurance to a new provider, but this isn’t the case. Contact your old insurance company to confirm that your policy is cancelled and you do not want to renew it.

Benefits of transferring insurance coverage to another car

Transferring your current auto insurance policy to your new car instead of starting a new one has its perks, mainly convenience. It can save you time and maybe even some money. Plus, since you already know the company, reaching out for an updated quote for your new car should be simple.

Once you have that quote, you can compare it with quotes from other insurers—or let a trusted BrokerLink broker do the legwork for you. With quotes from your current insurer and others, you’ll have all the information you need to make the best decision for your coverage.

Key considerations when transferring auto insurance to a new car

Before you buy a new car, it’s worth thinking about more than just the make and model you want. For example, it’s a good idea to understand the vehicle registration process in your province or territory and consider the type of insurance coverage you’ll need to protect it. To help make buying and insuring your new car easier, here are some tips and key things to keep in mind:

The cost of transferring your insurance policy

If you get an updated car insurance quote from your current provider and it’s over your budget, don’t stress. While sticking with your existing insurer is often the easiest route, it’s not your only option. You can reach out to a trusted insurance brokerage like BrokerLink, where a broker can shop around for quotes from Canada’s top insurers on your behalf.

With those quotes, you’ll have everything you need to make an informed decision. Sometimes, switching providers and starting a new policy can end up being the more affordable choice.

Just remember that there may be a cancellation penalty for cancelling your policy early. Be sure to factor that amount into your calculations when deciding if getting a new policy is the better option.

Familiarize yourself with the process of registering a new vehicle

Reach out to BrokerLink to learn more about registering a new vehicle in your province or territory. One of our expert brokers can guide you through the process and let you know what information and documents you’ll need, like the vehicle’s manufacturer and model year.

Request a copy of the insurance policy transfer

If you decide to transfer your existing policy to your new car, request a copy of the insurance policy transfer from your insurance company. Keeping a record of all contracts and policies can come in handy down the road.

Before purchasing new coverage or transferring your policy, contact an insurance brokerage

Insurance brokerages work to serve their clients. For example, when you contact BrokerLink, you are assigned a dedicated insurance advisor who will take the time to understand your needs and find the best policy for you.

Make sure to transfer your car insurance policy

We understand that life can get busy, but when you’re buying a new car, it’s important to take the time to transfer your car insurance. Letting your coverage lapse is never a good idea. If you don’t transfer your insurance and drive your new car without it, you could face a fine for driving without car insurance—and that’s a risk you don’t want to take. Plus, having a lapse in car insurance coverage on your insurance history looks bad to insurers. They may label you as a high-risk driver, which can lead to higher insurance premiums or risk your insurer cancelling your coverage.

Fortunately, many insurance companies give you a short grace period to update your policy and transfer your coverage to your new vehicle, though the exact time frame varies so be sure to check with your insurance company.

If something unexpected happens and you haven’t transferred your insurance yet, make it a priority to contact your provider and request the transfer as soon as possible. If you’re holding off in hopes of saving money, keep in mind that your insurance company will probably backdate any new charges to the date you bought your car. So, waiting won’t actually save you anything.

After you’ve requested the insurance transfer, be sure to ask for a copy of the updated policy for your records. They will likely send you a confirmation by mail or email.

Learn more from BrokerLink

Still have questions about the process of transferring auto insurance to another car? BrokerLink is here for all your car insurance needs. We can help you shop around for a new policy or answer your questions about the process of transferring an existing policy to a new car. We can even offer expert advice on things like how to save money for a car.

Give us a call, send us an email, or visit us in person to get started today. You can also take advantage of BrokerLink’s free car insurance quotes by using our online quote tool now. We can’t wait to hear from you!

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