If I use a shared secured loan from my own savings to buy a car, is it likely to be required to have “full coverage” auto insurance?
I know it varies per lender. Am I able to spend the loan on anything I want to no questions asked? In this case, a new car.
- DON WLv 72 years agoFavorite Answer
No. I've done this. If you are borrowing against money on deposit, it's not specifically a car loan, so you don't have to follow the normal rules for car loans. They won't ask what you are going to use the money for. You can get whatever level of auto insurance you want, provided you get at least the minimum required by your state.
- oklatomLv 72 years ago
Yes, if the have a lien on it. Even it they do not it is a good idea, also look into GAP coverage to protect yourself.
- thebax2006Lv 72 years ago
When ever a bank or credit union has a lean on a vehicle you need to have full coverage auto insurance.
- regeruggedLv 72 years ago
When you borrow money to buy a car, the loan will require you to buy full coverage. If you buy a new car it would be foolish to go without collision and comprehensive coverage.
- How do you think about the answers? You can sign in to vote the answer.
- fire4511Lv 72 years ago
If the car is collateral for the loan full coverage will be required., You are using your own money for collateral, and the bank will have no security interest in the vehicle You are not required to have full coverage in this case. Depending on the value of the car and the cost of insurance, full coverage may be a wise idea
- 1NetzariLv 42 years ago
If it's a car all lenders will require full coverage.
- CaoedhenLv 72 years ago
This is a question for your bank, not Yahoo. Only they can tell you their exact policies on making loans. Auto loans are usually treated separately from line of credit loans. For a car, the vehicle is used as security against the loan. A line of credit loan may or may not have such security requirements. \
Go and talk to a loan officer at your bank to get the real answers to your question.