Can You Finance A Car Without Insurance?

Can I Get Liability Insurance on a Financed Car?

Yes, you can get liability insurance on a financed car. In fact, the law in most states for all registered vehicles, including financed ones, usually requires liability insurance. Liability insurance covers damages and injuries you may cause to others in an accident. However, when you finance a car, the lender will often require you to carry additional coverage, such as comprehensive and collision insurance, to protect their interest in the vehicle until the loan is paid off.

Does a Financed Car Cost More to Insure?

In India, a financed car may often cost more to insure compared to a non-financed car. This is primarily because the lender or financing company usually requires comprehensive insurance coverage for the duration of the loan. Comprehensive insurance provides coverage for various risks, including damage to the vehicle, theft, and third-party liability. Since the lender has a financial interest in the car until the loan is fully repaid, they want to ensure that their investment is protected. Consequently, they may stipulate higher insurance requirements, leading to potentially higher premiums. However, the exact cost of insurance can vary based on factors such as the car's value, model, usage, insurance provider, and individual circumstances. It is advisable to obtain quotes from multiple insurance companies and compare policies to find the most suitable and affordable coverage for your financed car.

Can you have Liability Insurance on a Financed Car?

Yes, it is possible to have liability insurance on a financed car. In fact, liability insurance is typically required by law in most states and provides coverage for damages or injuries that you may cause to others in an accident. However, if you have financed your car through a lender, they may require you to carry additional insurance coverage, such as collision and comprehensive coverage, to protect their investment in the vehicle. It is important to check with your lender to find out what insurance requirements you need to meet and to ensure that your coverage is sufficient to protect you and your lender in the event of an accident or other unexpected event.

Can Someone Else Insure My Financed Car?

The question of whether someone else can insure a financed car in India is one that is not often asked. The answer to this question is yes and no.

It is possible for someone else to insure the car if they are an Indian resident and own a car themselves. This person would need to provide proof of their residency, proof that they own a car, and proof that they have sufficient income to pay for the insurance premiums.

It is not possible for someone else to insure the financed vehicle if they are not an Indian resident nor do they own a car themselves.

Does Car Finance Include Insurance?

Yes, but only if you are buying a new car. If you are buying a used car, then you will have to buy it with or without insurance from the dealer. In India, car finance is known to include insurance. However, this is not the case in most countries across the globe. This is a question that many Indian car buyers get confused about. There are a lot of misconceptions about what insurance covers and what it doesn’t cover.

Car loans do not cover the insurance or registration fees that you have to pay at the time of buying the vehicle. Mandatory car insurance needs to be purchased separately and all vehicle registration-related costs also have to be borne by you as they are not covered by your car loan. However, few banks cover these costs under special schemes.