Quick Answer: Do You Need Full Coverage On A Used Financed Car??

Most conventional lenders require borrowers to purchase full coverage insurance on the vehicle while the lender is a co-owner of the car.

Full coverage insurance consists of physical damage coverage and the state’s minimum coverage requirements.

What happens if you don’t have insurance on a financed car?

Most lenders won’t repossess a car when the car isn’t insured. This means that the borrower can keep the car but they will pay more each month on the loan because a fee for lender insurance has been added to the balance. Don’t pay more to finance a car because you don’t have insurance.

What kind of coverage do I need for a financed car?

Minimum liability coverage – The coverage required by the state must be included in your auto insurance for financed vehicles. The usual coverage included consists of the Personal Injury Protection, Property Damage Liability, Bodily Injury Liability and the Underinsured/Uninsured Motorist Coverage.

Can you finance a car without insurance?

Auto loan lenders will let you borrow money to pay for a car as long as the car is well-maintained. Since the vehicle is used as collateral on your car loan, the finance company will verify that you have the right insurance on your car. You can’t just carry liability insurance and drive off without any issues.

Photo in the article by “Gary Stein” http://garysteinblog.blogspot.com/2006/03/