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I am play-shopping for a car and just looking, getting a feel for things. I know that leased cars require full coverage, which is why I will not be leasing one for quite some time, but don't know if I will for cars bought through a loan.
Like lets say I got a loan from my bank (for example). Lets just say the loan is for $10k. If I bought a car from a dealership with said money, will that car need to have full coverage because it was bought with loaned money?
I might sound stupid to some people reading this but this will only be my second time buying a car and I really don't want to make mistakes. I am actually confused and the last thing I can afford is full coverage as prices for state minimum, for me, are already high.
And with the loan, is that even smart? Going through my personal bank?
Any vehicle for which you borrow money to buy, and is the collateral for the loan, requires full coverage. The only exception might be if you get a non-directed personal loan (such as a sight loan from a credit union).
If it is a personal loan, also called a signature loan, then no you are not required to have full coverage. Although with a new car it would be dumb not to if you cannot afford to buy another one with cash.
The downside to doing this is that the interest rate will generally be higher on a personal loan because there is no collateral. You might end up paying more per month on a personal loan than you would on an auto loan because of the difference in interest rates.
A loan will require comp and collision because until you pay it off, it is theirs and they want to ensure if something happens to it they get their money back? also, they typically won't allow you to go with a deductible over $1000. A loan from private and personal banks will usually require you to add the vehicle and need to see proof that they're listed as lei holder before okay in the deal.
The difference between coverages for leasing and a loan are the most leasing co will require bodily injury limits at 100/300 and property damage limits at 50 depending where you live.
Any vehicle for which you borrow money to buy, and is the collateral for the loan, requires full coverage. The only exception might be if you get a non-directed personal loan (such as a sight loan from a credit union).
I'm no banker, but you would probably have to have 100k in the bank and perfect credit to get a personal loan for 10K. The want collateral.
Unless you have cash lying around to fix the car if you get into an accident and to pay the balance of the loan if it gets totaled, I would get full coverage insurance.
Both of our vehicles that we currently drive are paid in full and we still carry full coverage on them. Going to liability is not an option for us on our daily drivers.
I might sound stupid to some people reading this but this will only be my second time buying a car and I really don't want to make mistakes. I am actually confused and the last thing I can afford is full coverage as prices for state minimum, for me, are already high.
You want a $10,000 to buy a car but you don't have enough money for car insurance?
Do you comprehend what you are stating?
Maybe time to rethink this and get a much less expensive car.
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