Will buying a vehicle “as is” affect your auto insurance rate?

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Whether you buy from a private seller or a used car dealer, when a vehicle is listed “as is,” you’re opening yourself up to a lot of potential expenses that you may not even be aware of yet. 

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The term “as is” means that the vehicle is being sold in the condition you find it in on the lot, with all of its issues, whether they’re known or unknown.  

From undisclosed accident history to liens (money still owing on the vehicle), there’s a lot of research you should do as a buyer to ensure you’re not getting taken to the cleaners.   

One thing you’ll need when buying any car is insurance coverage. When it comes to securing car insurance coverage for an “as-is” vehicle, you might wonder: will this designation bother your insurance company at all? Do you need to tell them that you bought the vehicle “as is”? And could that affect your premium? 

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Does buying an “as-is” vehicle affect your car insurance rate? 

According to Anne Marie Thomas, director of consumer and industry relations for the Insurance Bureau of Canada, buying a car “as is” will not affect your insurance premium.   

“It’s not a question that is asked on the auto insurance application,” she says.  

However, Thomas adds, “Anyone buying a car, whether it is ‘as is’ or not, should be aware that if there is any prior damage to the vehicle that has not been repaired, that information is to be conveyed to the insurance company.” And this is a question asked on the auto insurance application. 

“You have to report unrepaired damage because if you are involved in an accident, the insurance company will only pay for repairs for damage that occurred during the accident, not any damage from before you owned the vehicle,” Thomas explains.  

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If the insurance company can’t determine current damage from previous damage, they may not pay your claim, so it’s important to inform them accurately and honestly at the time you purchase the vehicle.  

What to look for when buying an “as-is” vehicle 

If you live in Ontario, you can protect yourself when purchasing a vehicle in “as is” condition by asking the seller for the Used Vehicle Information Package (UVIP).  

UVIP is specific to Ontario, but other provinces have their own equivalent, such as the vehicle history report in British Columbia.  

The UVIP contains a complete history of the car in Ontario, including:  

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Keep in mind that when buying from a private seller, there’s no guarantee any repairs were done properly. This is one advantage of purchasing a used car through a dealer — they’ll often make any required repairs before selling the vehicle, though you’re still technically buying the vehicle in “as is” condition. You might also want to have a mechanic inspect the vehicle before signing on the dotted line. 

It’s important to understand that when buying an “as-is” vehicle, there is no warranty or quality guarantee being offered — although a certified pre-owned vehicle from a dealership sometimes comes with additional manufacturer warranties.  

When buying a vehicle “as is,” you are liable for any issues with the car once the sale is completed. Often, a seller is listing the vehicle in “as is” condition because it needs some work. This could give you bargaining power when it comes to negotiating a lower price. If you don’t mind investing a little work into the vehicle and its history is clear of any accidents, it could end up to your advantage.  

But again: while buying a car “as is” shouldn’t affect your insurance premium, it’s important to report any previous, unrepaired damage to your insurance company to ensure you have coverage in the event of a future claim.

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