Is there any obligation for a car dealer or bank to ensure that a new vehicle being financed is insured before being driven off the lot?

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Is there any obligation for a car dealer or bank to ensure that a new vehicle being financed is insured before being driven off the lot?

Asked on December 15, 2013 under Accident Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

No: the insurance obligation is on the car's new owner, to make sure that he or she has insurance before driving. Neither the seller nor the company financing the car (i.e. the bank) is obligated  in this regard.

And as for the buyer: not only is the law, but it's a *very* good idea to not drive without insurance; getting into an accident with insurance can result in financial ruin.


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