What Is Trade Car Insurance? 
Trade car insurance is also known as temporary trade-in car insurance . This is a type of auto policy that is designed to provide short-term coverage when you are between vehicles . However , rather than thinking of it as a separate type of auto policy , think of it as a regular policy with a shorter life , much like a short term or temporary health insurance policy that only covers you for a brief , predetermined number of days . Depending on the state you reside in , and how vehicle registrations are handled in your state , trade car insurance may not even be necessary or available . 