Keep Insurance on Trade In While Waiting for New Car?


My 2019 RAV4 lease expires this today. Last week I visited a Toyota dealership that will trade it in. I left the car at the dealer’s while my Corolla Cross is in transit (1-2 week delivery). I kept the keys.

I called Toyota Financial Services and learned I have a 10 day grace period on my lease (until May 20) As I understand, the dealer will file the paperwork to buy the RAV4 and lease the Corolla at the same time.

Should I keep insurance on the car through May 10, May 20 or until the new car comes in?

Thank you!

Don’t cancel the policy. You can change out the new vehicle when it comes in. If you cancel now you will need to re-insure the new car and have a lapse in coverage. That will make it so you will not get preferred rates with most carriers.

edit- just noticed you have the keys and have not filled out paperwork to sell the old vehicle. You need to keep it insured.

I am considering moving from Geico (RAV4) to NJM for the Corolla Cross because NJM has GAP insurance. Geico does not. Would you still advise the same?

Absolutely- You will get a better rate as a currently insured customer. The new company might not even pick you up without previous coverage. How much money are you really going to save by not having insurance for 10 days???


You’re right. Insurance aside, I guess I am also concerned with what happens if shipment is delayed and the car does not arrive by 5/20 (grace period)?

Does Toyota Financial Services now charge me for another month? Am I violating my lease by “keeping it” even though it’s parked at the dealer’s?

If you’re really hell bent upon saving money - get a non-owners policy so you have proof that you didn’t lapse

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Why on earth would you do that?

You haven’t officially returned the lease, which would involve surrendering keys and signing some paperwork. So you’re still on the hook for whatever the bank is going to charge you. They don’t care where it’s parked until it’s officially returned to them.

Neither have you kept the car in your safe possession. A dealer’s parking lot can be a conveyor belt of cars constantly being moved by lowly paid porters who don’t GAF what they scratch, dent or ding as long as no one catches them.


If you still have the keys then you haven’t returned the car. If something happens to it in the next 10 days that is on YOU and not the dealer, so unless you want to pay out of pocket you’ll want to keep it insured.

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Are you trading the car in (hopefully with equity) or just returning (grounding) the lease?

I agree, you should go get the car back right now. Someone hit my mint S2000 when it was only a few years old in a dealer’s parking lot. It’s almost as bad as parking at Walmart. You don;t want to be on the hook for any damage they cause and refuse to fess up to.


I can’t suggest against this enough. I was with NJM for 25 years and never knew better. They are a nightmare with everything. Rates go up constantly, getting claims covered takes a great deal of effort and a long time, they will bump you for every little thing and bump you every year just because.

Just one example: once up on a time, I was involved in an accident that was not my fault, but the other driver’s insurance was fighting it. NJM eventually fixed my car and took on going after the other insurance. A couple of months later, my policy was up for renewal. They DOUBLED my rate! I argued and their answer was “we paid to fix your car. doesn’t matter whose fault it was.” Again, I didn’t know better and continued on. 10 months later, they won the battle and got my deductible back and erased the claim from my insurance. I called and asked “what about the double rate I just paid this past year?!” Their answer? “Too bad!”

Second story: after 25 years, I looked around and was getting quotes for 50% my NJM policy cost. It was explained to me that, the longer you hang around, the more you’ll pay. Not that you become a preferred customer or get any grandfathered benefits. Nope. Automatic increases and you wind up eventually paying more than new customers. I spoke with NJM and told them they’d be losing a 25-year customer with multiple cars and homes insured through them. Their answer? “oh well.”

My boss is a firm believer in switching insurance every 3 years. It seems to be the sweet spot for getting the best rates and the least hassle involved with switching.
Always check multiple insurance companies when getting a quote.

You don’t need GAP on a Corolla Cross in the current market.

Why doesnt the dealer just ground the lease and take ownership and did the dealership agree to parking said vehicle as part of the new car deal anywhere in writing?

As an insurance broker who is state licensed in NJ, I can absolutely second this.

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