Switching Between Auto Insurance Plans Question

[DonnytEN]

Hello.

Say you wanted to get a used car from a dealership. A vehicle that was around 5,000 USD. Say the dealership requires the person to have full coverage auto insurance, that insures both their car and the victims in case of an accident. Say your full coverage is $360.00 a month for 'new' drivers. You get the auto insurance and make payments on the car.

Say though you can never be sure of people on the road, you are extremely confident in your driving skill. You need to save money so you call the insurance agency after you've purchased the full coverage package, and switch your insurance to liability only . You realize this wouldn't be a smart thing to do but you desperately need to save any and all money you get from your job. Risk aside, would the dealership find out that you changed your auto insurance?

 

[Gazellatang]

Here's a thought... If you can't afford the insurance, then don't buy a car that has insurance coverage requirements. Seems pretty basic to me. Don't spend money you don't have!

 

[carol369]

Hello.

Say you wanted to get a used car from a dealership. A vehicle that was around 5,000 USD. Say the dealership requires the person to have full coverage auto insurance, that insures both their car and the victims in case of an accident. Say your full coverage is $360.00 a month for 'new' drivers. You get the auto insurance and make payments on the car.

Say though you can never be sure of people on the road, you are extremely confident in your driving skill. You need to save money so you call the insurance agency after you've purchased the full coverage package, and switch your insurance to liability only . You realize this wouldn't be a smart thing to do but you desperately need to save any and all money you get from your job. Risk aside, would the dealership find out that you changed your auto insurance?

They can find out. In some states you're required to have full coverage in case of an accident. If you don't have full coverage, the dealership wouldn't get their money.

 

[djs]

If you owe money on the car, the insurance company adds the lienholder (either the bank or dealership) to the policy and they will be notified of changes that materially affect them, such as dropping to liability only.

Bottom line, yes, they will know. They will then require it be corrected or they will 'force-place' insurance on the car, which is extremely expensive.

Some options you can do.....
- $360 a month for full coverage is crazy expensive. Shop this and see if you can't do better. There might be reasons its this high, but my guess is, you can lower this pretty substantially.

- Raise the deductibles, say to $1000. Sometimes lienholders require $500 deductibles, but I would make the change and see if they complain. Usually all they will do is ask for it to be changed back, if anything (very rare, as long as the insurance is in force).

Ironically, if money is tight, one of the worse things to do is to change to liability only. Insurance is there to protect you in the event of a loss. What would happen if you got into an accident and didn't have coverage on the car? How would you get it fixed?

If you can write the check, then yes, liability only may make sense. When you can't write the check, its not a good thing to do.

Dan

 

[DonnytEN]

Thanks for the information fellas.

Yes that is way too expensive for me. Wheras the liability only is 136 dollars per month.

I needed this car because taking the bus always made me late for work. And aside from that its more convenient for me.

I understood the risk and was willing to take it in the event of an accident. I am confident in my driving skills, which I know isn't enough, but I literally only drive it to the grocery store and to/from work.

Is there anything I can do? 360 dollars a month for full coverage is killing my pockets, the dealership was nice enough to allow me to split the down payment between two pay periods. Now All I owe is 100.00 bucks from the down payment+ the 130.00 a month car payment. Then The regular car payments will follow after that.

I understand I am a 'new driver' and all, but almost everywhere I call, these guys charge out the ass for a vehicle thats not really all that expensive.

 

[Guest]

Thanks for the information fellas.

Yes that is way too expensive for me. Wheras the liability only is 136 dollars per month.

I needed this car because taking the bus always made me late for work. And aside from that its more convenient for me.

I understood the risk and was willing to take it in the event of an accident. I am confident in my driving skills, which I know isn't enough, but I literally only drive it to the grocery store and to/from work.

Is there anything I can do? 360 dollars a month for full coverage is killing my pockets, the dealership was nice enough to allow me to split the down payment between two pay periods. Now All I owe is 100.00 bucks from the down payment+ the 130.00 a month car payment. Then The regular car payments will follow after that.

I understand I am a 'new driver' and all, but almost everywhere I call, these guys charge out the ass for a vehicle thats not really all that expensive.

It doesnt mean a damn thing, how good of a driver, YOU think you are, its the other people you need to worry about.......

What if you have liability only, and someone hits you that doesnt have insurance? Then the finance company is screwed and you are also because you have a totalled car and no one will pay to fix it.

There are reasons for what they do, it is in your loan contract, that you must maintain the full coverage.....if you drop it, they will put a forced policy on you that doesnt cover you, it covers the loan holder....

Simply get a cheaper car, or pay cash for a car and then you can have liability only....

Let me also guess, you havent had insurance the previous 6 months, so, you are paying higher for this, after you have CONTINUOUS insurance for 6 months, then get new quotes and it will be cheaper.

Another thing, you make it seem like you take the bus everywhere and havent driven, so why do you think you are a good driver if you havent been driving?

Are you the only driver listed? You can exclude other drivers in your household, that could help

 

[DonnytEN]

I understand what you are saying. Maybe after six months I can get some new quotes.

I've been driving, yea, for a while, off and on, illegally. Now i'm 'legit'. Got my permit back in 2000. just never pursued getting a license because I never had money to get a car. If only I had got situated when I graduated HS in 2004, I'm sure my insurance would be cheap by now.

I'm also the only driver in the household.

 

[AutoInsuranceExperts]

Great advice from DJS, as usual!

There is no question they will find out. To be honest, although $360 is high, if coverage is forced placed on you it will likely be even higher than that...

 

[insurancesmarty]

If the dealership is listed as a lienholder then they will find out. Sounds like you need to do some more insurance shopping.