Here's why:
* The dealership is taking ownership: When you trade in a car, the dealership is essentially buying it from you. Since they become the owner, they are responsible for its insurance.
* Insurance covers accidents, not trades: Your car insurance policy protects you from financial loss in the event of an accident or damage. It doesn't cover the value of your car during a trade.
However, it's still a good idea to maintain insurance:
* You might need coverage while driving the car: If you're still driving the car to the dealership, you'll need insurance to be legally compliant.
* You could be liable for damage: If you damage the car before the trade-in, you could be held responsible for the cost of repairs.
In summary: While you technically don't need insurance on a car you're trading in, it's best to keep your policy active until the trade-in is finalized to protect yourself from potential liabilities.
