A friend of mine bought a certified pre-owned Camry, and he’s only carrying liability insurance. How is he getting away with that?
Don’t lenders usually require full coverage on both new and used car loans?
A friend of mine bought a certified pre-owned Camry, and he’s only carrying liability insurance. How is he getting away with that?
Don’t lenders usually require full coverage on both new and used car loans?
In some states, like North Carolina, if a car isn’t paid off, the lender technically owns it. If they find out he’s underinsured, they could take legal action.
Toyota doesn’t always ask for proof of insurance, but if they find out their asset isn’t fully covered, they’ll add temporary insurance to his loan or even mark him as in default and repossess the car. It’s risky to go without full coverage.
@Dev
When I bought my Toyota last summer, they required me to show proof of insurance with the car’s VIN before I could drive it off the lot.
Ariya said:
@Dev
When I bought my Toyota last summer, they required me to show proof of insurance with the car’s VIN before I could drive it off the lot.
Yeah, they check at the time of sale, but they don’t actively monitor it. Their app says you just have to maintain the coverage required in your contract. I’ll ask my salesperson about how Toyota handles it internally—he knows everything about this stuff.
@Dev
But my friend has been doing this for years without a problem.
Pretty sure every bank requires full coverage for financed cars.