Why do financed vehicles get repossessed?
Could your vehicle get repossessed for not having insurance? Or is it only because you don't pay your loan?
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Answered on Jul 09, 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.
“The most common reason why a financed vehicle would be repossessed is due to missed loan payments.
While it is illegal in most states, dangerous, and likely against your contract to not have insurance, vehicles typically aren’t repossessed because of it.
If lenders discover you don’t have insurance, they’ll likely place forced coverage on your vehicle. This car insurance is often significantly more expensive than if you kept your own insurance on your car. The monthly cost are usually added to your loan balance as well.
However, every lender is different. You should review your loan contract if you have any questions about it. The terms and conditions should clearly state reasons why a vehicle may be repossessed.
It’s important to be aware as any time you’re in violation of your contract, your vehicle could be repossessed.”
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