Ok, here's the deal. I just got my car back from the body shop. I gave it to my dad's friend, who completely removed all the rust and gave it a brand new shiny paint job. It cost me $1,825. So, since I wanted to still have money left over to do engine mods, my dad took out a loan for $2,000, with me as the co-signer. I will be making the payments on it, which will be hard since I am only a teenager, but I will manage. Since I live in IL and there is a ton of salt on the road right now, I am not going to drive in the car in the winter. So the insurance was suspended on the car. Now I have learned that, because the loan was taken out for the car and they now have the title, I need to have insurance on the car. Do I have to have full coverage on it, or is there a cheaper way of doing it? I know I can't just have fire and theft. If I have to pay for full coverage and the loan, I will have no money left at all. It won't be a problem come summer, because I'll have more hours to work because of no school. What are my options? ANY help would be much appreciated. Thanks.

 

All cars that has a lien (loan on the vehicle) must have coverage. Question, is your insurance under your parents name? I find this to be the cheapest way to get the lowest insurance rate. If your car is under you parents name, have them inform the insurance company that the car will be stored for the winter. They should be able to lower the insurance rate. I am sure your insurance company knows how bad F-body's are in the snow. If they will not lower the rate, start shopping for a new insurance company. The bank does not care who you have insurance with, just so long as you have one incase of an accident.

 

Also talk to your insurance company about placing the car under "storage insurance". This is basically Comprehensive coverage without collision, etc. It covers the car for most damage except for damages incurred while driving. I have my two convertibles in storage for the winter (being from just outside of Chicago myself), and my rates dropped from $410/6 months for the two of them, to $70/6 months. Big difference. Plus, you still get an insurance card to show the folks at the bank. - John '89 L98

 

You need to talk to the bank. The bank has requirements on what insurance coverage you must have(full-coverage) and the dollar amount of protection. The bank is protecting themselves in case the car is damaged or totaled. I've seen very few banks that will allow a lesser insurance for any reason. Talk to the person at the bank that did your loan. He/she might make an exception.


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82 camaro--original steering wheel, brake/gas pedals, seats--everything else modified
82camaro

 

If the bank is holding the title as collateral on the loan, get a new loan that doesn't require the title for collateral. The loan will be at a higher interest rate, but I'm sure it'll save you money in the long run.

Calculate it and see what makes sense.

 

U can drop like $50 off your monthly bill if you only get covered for liability. The vehicle insurance (in case something is smashed) cost me more than i paid for the car in 6 months!!!! So now i pay as much for my F-Body as I did when i drove my parents Ford Taurus Wagon.

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--Steve S-- 84 Trans Am 305 HO 5 speed, completely stock emissions restricted slow 150 hp(chilton rating) 240 torquer that needs RELEASE!!!!

P.S. Daily Driver

 

I've learned alot over the years on this area. First, talk with your bank to see if they will let you keep storage insurance (and what the deductibles should be). You shouldn't have a problem as long as the bank knows where the car is being stored.

The problem with this is vehicle registration. Many states require that you maintain liability insurance in order to keep your tags and registration. Since you are putting the car in storage, you stop paying liability, thus you must deregister the car. Talk to your DMV about your state's requirement.....especially since some states will fine the $hit out of you if they find out you dropped liability on the car.

Another option is "suspended" insurance. When you do this you still pay the full insurance premium, but you "agree" with the insurance company not to drive the car. Usually this requires an insurance agent to record the odometer reading at the time of the agreement. When you decide to drive again, all you do is call your insurance agent and let them check your odometer again. You will then get reimbursed a high percentage of whatever you paid as premiums during the time coverage was suspended. I had suspended my coverage for a year, paid about $1,100 over that year, and got refunded aboout $900 after I cancelled the suspension. This will also satisfy any requirement to the DMV since you are still covered under liability.

Sorry this reply was long winded....hope this info helps you out.

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92 Camaro RS LO3, 5-spd, T-tops
Mechanics:
Open Air Element w/K&N Filter, Flowmaster 3" Cat-back Exhaust, Z28 Grille w/aftmkt fog lamps
Electronics:
Alpine 8030 Alarm System, Valentine One Radar Detector (How did I ever drive without one?), Pioneer DEH 7450 Head Unit w/6-pack CD changer, Pioneer DEQ 7600 Sound Processor, 2 Kenwood KAC-90 Amps powering 2 12" Pro Red subs and 4 Infiniti speakers.
NEXT UP: SLP 1 3/4" Headers/Y-pipe, Centerforce Dual Friction Clutch kit

 

Just an addendum, most banks will not give you a car loan for an older car, they will give you a persoanl loan and request a reason for the loan. If this is the case, they can not require you to do anything for your car. The only way they can is for a purchase/leinholder loan, or if you used the car as collateral. Did they take your title? Was a new one issued? Whose name is the title in? Loan? There is a bunch of ways to get loans, and an even greater amount of loopholes. Just remember this, in reality they have very few options if you keep up with the payments and have no insurance at all. The only way they lose their money is if you file bankruptcy, and in that case they have to convuince a judge to sell off your assets to pay the note.

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"I don't want to be right - I just want to know if I'm right"
-Einstein