Vehicle Code section 5604.5

(a)

Every dealer who, upon transferring by sale, lease, or otherwise, any new or used vehicle of a type subject to registration, requires the transferee to insure the motor vehicle shall, if the required insurance policy is sold by that dealer at the time of the transfer and the policy does not insure the transferee against damages resulting from ownership or operation of the vehicle arising by reason of personal injury or death of any person, or from damage to property, notify the transferee of that fact in writing on a document other than the insurance policy. The document shall be signed by the transferee and an exact copy shall be furnished to the transferee by the dealer at the time of signature.

(b)

The document required under subdivision (a) shall contain a notice in English and Spanish in at least 10-point type that reads as follows:
The motor vehicle physical damage insurance policy you are buying does not allow you to legally drive on the streets of California. Generally, in order to legally drive on the streets of California, you must either purchase a type of insurance called “liability insurance” or deposit a bond with the Department of Motor Vehicles. If you drive this or any other motor vehicle without liability insurance or a bond, a police officer may request evidence of liability insurance or a bond at the time of a traffic stop. If you do not have evidence of liability insurance or a bond during a traffic stop, the fines can be from several hundreds of dollars to an amount that exceeds $1,000. If you get into an accident and do not have liability insurance or a bond, you will lose your driver’s license for one year. If you cause the accident and do not have liability insurance or a bond, you may have to pay the injured person yourself and these costs may be substantial.
Liability insurance as well as the insurance needed to obtain a loan for your motor vehicle may be purchased through a licensed insurance agent or broker. The price for both types of insurance may be more or less than the price for the insurance you are being offered by the dealer. The State of California advises you to shop for insurance because prices may vary substantially.
I have read this notice and understand that I am about to buy a type of insurance that is available elsewhere and that does not allow me to drive the motor vehicle legally on the streets of California.
I also understand that if I drive on the streets of California without liability insurance or a bond, then I may be subject to severe financial penalties, including fines and personal payment for any damage to others that I may cause while driving.
(Spanish translation of the above text to be developed by the Department of Motor Vehicles and to be inserted below the above English version text)
Dated:
Signed: ”

(c)

The department shall also make available a translation of the Insurance Warning notice set forth in subdivision (b) in any of the languages used in the most recent statewide voter pamphlet.

Source: Section 5604.5, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=VEH§ionNum=5604.­5.­ (accessed May 10, 2025).

Last Updated

May 10, 2025

§ 5604.5’s source at ca​.gov