Can I register my financed vehicle as non operational to avoid paying insurance?
My insurance is expensive for my financed car. I want to get an older vehicle to drive instead. I'll still be making payments, but won't be driving my financed car. Can I register it as non operational?
Answer provided by
Answered on Jun 23, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
“Whether you can remove insurance on your vehicle will depend on your finance agreement. Most lenders require that financed vehicles carry comprehensive insurance and collision insurance.
To carry these with insurance carriers, you’re also required to have liability car insurance.
Even if you’re still making payments and not driving the vehicle, lienholders typically want to ensure the vehicle is protected. If the vehicle is parked and a windstorm knocks a tree onto it, lenders want the damage to be fixed and covered under insurance.
You can reach out directly to your lender to find out what they require. If they don’t have any insurance requirements, you should be fine to register it as non operational and remove the insurance. If they do, you’ll need to follow them as you signed a contract when purchasing your vehicle.”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
Can you get a car loan without a Social Security number?
"I'm a foreigner living in the U.S. who wants to get citizenship. In the meantime, I need a car to get to work. Can I get a car loan without a Social Security number?"
Jun 16, 2021
How do home insurance companies handle claims involving theft?
"Some electronics were taken from my home during a break-in and I need to file a claim. What can I expect when I report my losses to my home insurance company? "
Apr 08, 2021
How do I get damage from a shopping cart covered?
Can I file a claim with my insurance if a shopping cart hit my car? Another driver at the grocery store hit my car with their shopping cart. I got their insurance information, but they're refusing to pay. Will it raise my premium?
Jun 22, 2021