What are the consequences for not having insurance when you're financing a car?

Question

What are the consequences for not having insurance when you're financing a car?

Answer 1

the leinholder will force place insurance to protect their interest in the car.  depending on where you live if you dont carry insurance you can have your tag taken away, license revoked, have to pay fines, etc... if you wrieck the car and have no insurance, you are STILL liable to pay the balance you owe on the car.  why would you take that chance?

Answer 2

The financing company can forced place insurance and you will be responsible for paying for it. Forced placed insurance is much more expensive. Some finance companies Can force place and have it in their contracts that once forced place it has to stay forced placed for one year, which will cost you a ton of money.

Answer 3

The consequences are not so much with the finance company.  (They will force you to pay enough insurance to cover their investment in your vehicle.  It will be included in your monthly payment.)

What you have to have is proof of insurane to get your vehicle registered in the State you reside.  Many States will suspend your driver's license if they become aware that you do not have insurance on your vehicle.

If you have an insurance policy (not through the finance company) and you let it expire, that insurance company is required, by law, in most States, to notify the vehicle registration office.  

The insurance is for your protection against other drivers so, you might as well get some and keep your policy current.

Also, many States have a minimum coverage that you are required to carry on your vehicle.

Answer 4

as stated before, the finance company will force insurance for their car which is much more expensive than getting your own policy. you can get caught without insurance which can lead to fines. you can wreck the car and end up paying out of pocket for all damages. it can be stolen or vandalized or catch fire. you can injure or kill your passenger or someone else and not have any coverage to protect you... so not worth it...

Answer 5

When you go to finance a car, the loan co will want to see proof of ins. if you drop the policy, (cancel or expire) the ins co will

notify them.

You will then be in violation of the loan agreement, and the loan co will either demand payment in full at once of the remain ing balance of the loan, or they will purchase, for you, ins from their own source, and add the premium to your loan.

Answer 6

Breach of contract repo