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If the car insurance is cancelled on the loaned vehicle can the bank repo the car when all payments have been on time?


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Wiki User
2015-07-15 19:47:22
2015-07-15 19:47:22

Wayne, Personally as a Repoman, I see 4-5 orders a month to pick up a vehicle that the bank has no proof of insurance on. I believe there is something in a car buying agreement that requires you to carry the insurance.

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YES. The bank or lender, who owns the vehicle ( You don't own it until ALL the payments have been made ) are within their rights to take it back as you are not insured if you don't PAY for the insurance. You are risking THEIR property, the car, by not having insurance coverage on it continually. Remember, you DON"T own it until ALL the payments have been made in full. Until then the company that LOANED you the money to buy it , OWNS IT.

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No. Liability insurance follows the vehicle so the person who owns the vehicle you are borrowing needs to make sure that they have insurance and also needs to add you as a driver on his or her policy. You also need to make sure that this is done because if you drive the vehicle and get stopped you will get the ticket for driving without insurance. If you have an accident and are not added as a driver his or her insurance company may deny the coverage for material misrepresentation and guess who will be sued by the person you hit? Both of you will be sued and both will be responsible. Insurance companies to do not like vehicles to be loaned to unknown drivers.

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If the dealer holds the lien and is the one that loaned you the money to purchase the vehicle he can repossess the vehicle if you fail to make your payments on time. Otherwise the selling dealer has no claim on the vehicle whatsoever.

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It depends on the insurance company. Some insurance companies will cover the vehicle when it is loaned to someone else. Many have restrictions that they will only cover someone of a certain age or older.

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You insure a vehicle. The buyer. The only thing the cosigner is responsible for is paying the bank back the money it loaned if the buyer doesn't. The principal driver of the vehicle who should also be the buyer.


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