[worried4kids]

Hello...

My niece just recently bought a car in Arkansas, about 4 weeks ago. She's 20 and financed the car. We lent her the money to get the tags and taxes paid for, it was like $500.00....that was yesterday.

Here's my question....today she got in a wreck and her car is totaled. She told us she only has liability. Is that possible in Arkansas? What happens when you buy a car in Arkansas? Do they make you show proof of coverage? Doesn't the finance company make you show proof of that as well? Doesn't it have to be "full" to cover the investment? We're not sure she's in the right state of mind to be answering the questions right now as she's very upset and shaken up, but she wants us to tell her what to do next, and we don't know. And the insurance co. told her to call back on Monday.

We're in TN, and just moved here, so all we know about is the laws of insurance in Illinois and what happens in IL.

Can anyone help me with this? I appreciate it.

[InspiredWriter]

When i bought my car, i had to get the car on the insurance before they would let me drive it off the lot.. Which was full coverage insurance, nothing less.. I'm only 19 but that's all that i really know.

I could not get liability until i fully paid off the car..

[Sam I Am]

Did she finance through a bank or actual credit company like GMAC, or through the car lot itself? I know there are car dealers in the River Valley that will allow you to have liability only if the car is worth less than $X (I want to say $10K, but that may not be right) if they are financing it. I was under the impression that you had to have full coverage as well if the car was financed and only recently found out about about this wiggle room that some used car dealers offer.

I am assuming that it is a used car with sales taxe that low - was the accident her fault?

You can always contact the insurance commissioner's office with regard to the actual state law:

Arkansas Insurance Department
1200 West Third Street
Little Rock, AR 72201
(501)371-2600 or 1-800-282-9134
(501) 371-2618 fax

or by email

Arkansas Insurance Department

[worried4kids]

Thanks....is that tax low then? My husband and I thought it was nuts. We of course have always had our tax included with our purchase price when buying vehicles...so, we were confused. WE know things are done differently in each state. The car is used, I don't know exactly how much she paid for it, and don't know if she went through a dealer financing or bank, I think it was dealer financing. So, I am hoping for her sake and ours that she DOES have full coverage, because otherwise, we'll all have an issue. We didn't co sign or anything like that, but we know she'll be looking to us for more help. She's a 20 yo student at Arkansas State. And I wonder if she can get that tax fee back that she just paid for? She paid for it Friday, and got in the accident on Saturday. If she can recoop that money, that would be great. Thanks everyone.

[Sam I Am]

Tax is whatever the state charges and county tax - in Pope Co. I think it is 8%, that's where I'm at. If she only got liability through a small finance place like the car lot, if it's her fault she will still have to pay for the car, crashed or not - and I doubt seriously the state will give her back that money. She bought it, so whether it got trashed or not isn't their problem. I'm assuming (again) from your post the car was totaled.

Best to see what the ins. co. says before sweating it too hard. She still has a deductible...ugh...

[smileymimi]

If she got it financed through an indepentant dealer, they usually demand full coverage on the car , BUT some don't and the state of Arkansas only require you to have liability on the car. So if the car is totaled she will have to continue to pay the car off. It is a bad thing but that is the way it works benn there don't that

[cheely]

In the state of Arkansas as long as there is a lienholder on the vehicle you have to have full coverage. Meaning if you are still making payments on the vehicle (full coverage baby), but if your car is paid in full by law in Arkansas you have to have liability.