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you have insurance to start off with but then dont pay your insurance anymore will the bank repo your car

8 Comments »

1. 

   Maybe not.

   See, if you stop paying for insurance, your bank will add insurance (that doesn’t cover you, and doesn’t make you legal) to your loan payment. If you don’t pay that extra amount every month (typically an extra $500 or so) then your loan goes into default, and THEN they reposses your car.

   Comment by mbrcatz — May 7, 2010 @ 6:38 am

2. 

   only if you dont pay your bank loan or the cops pull you over

   Comment by Jimbo — May 7, 2010 @ 6:38 am

3. 

   The lender will force-place insurance to protect it’s interest in the title and the cost of that insurance will be added to your loan balance.

   Comment by Caveat Emptor — May 7, 2010 @ 6:38 am

4. 

   First the DMV will suspend your registration. then the loan company will repo the car. Read your contract, you promised to insure the vehicle.

   Comment by Tigg — May 7, 2010 @ 6:38 am

5. 

   No, but they will place a limited insurance policy on your car to protect their interest and will add the premium to your car payment. The insurance they place on the car will cost as much or more than your current policy but it does not protect you at all.

   Comment by Zarnev — May 7, 2010 @ 6:38 am

6. 

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   Comment by Tony — May 7, 2010 @ 6:38 am

7. 

   they can, and likely will as their collateral is at risk.

   Comment by Common Sense — May 7, 2010 @ 6:38 am

8. 

   Depends on the language in your loan.

   I supposed your loan could say something like that.

   Most loans say that if you don’t pay for insurance they will put "forced placed" coverage on the note. That means the loan company puts insurance on your loan to protect their interest in the car – it does nothing for your equity. Then they tack the premium payment for the forced coverage into your loan payment.

   Down side for you "forced placed" coverage is MUCH more expensive than the coverage you can purchase yourself.

   And yes, when you stop paying for insurance your insurance company notifies the finance company that your policy is no longer in force.

   Comment by MSAD — May 7, 2010 @ 6:38 am

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