Do I need to maintain car insurance on a car I am selling and have no intention of driving any longer?
Here in Md. you don’t if you turn the tags into the MVA before you cancel the insurance.
If it’s tagged, you do.
How do you intend to sell this car? If it is going to be driven to be sold (either by a test drive, or traded in), you really should keep the insurance on it. If you are worried about how much money you’ll get back because your insurance is up for renewal, don’t fret, the insurance company will pro-rate a refund for you. If you just need insurance for two weeks (or whatever) and your insurance renewal is for 6 months and don’t want to be out all that cash in the short term, just call your agent – you should be able to get a decent rate for just a month (or whatever).
It really depends on which state you live in. In OH, any vehicle that is registered needs to be insured at all times. Yes, there are many holes in this logic, but still it’s the law. An uninsured vehicle is a liability at best, and a serious problem at worst.
Make sure your vehicle is insured up untill the point of sale. Your insurance company should pro-rate your premium, if they don’t, change companies. Insurance is a payment to a party that covers your losses in the event of an unexpected event, you should expect that the worst might happen if your vehicle isn’t insured. Better safe than sorry.
Just one example of what can happen: in Virginia, if you drop the insurance on a car, the insurance company notifies the state. The state then presents you with a bill for the fee for having a registered, but uninsured vehicle, and it’s a flat $500.
So, you could choose to cancel the registration at the same time, but then you run into other problems. Local ordinances may make it illegal to park an unregistered vehicle, even on private property (to prevent people from turning their back yards into auto graveyards) - in most places, you certainly can’t park an unregistered vehicle on the public streets.
If you want a potential buyer to be able to take a test drive, the vehicle is no longer legal on the streets. That would be a fine time to have an accident: your car, you in the passenger seat, someone else driving it (who may or may not have his own insurance), no insurance on the car, no registration. Fun for everyone involved!
Bottom line, as others have said: keep the insurance coverage alive until you’ve signed the title over to someone else, and the car is out of your possession.
And also, if you are still making payments on it, the lein-holder probably requires insurance.