Car finance (loan) insurance requirements (store car)
There are current attractive incentives on new car purchase such as 48 months at zero interest and some advertised discount and perks in addition.
My question has to do with mandatory insurance on the vehicle- if it is used for part of the year and stored for part, with fire + theft (but no liability) insurance maintained on the vehicle, will that satisfy the terms of a typical finance contract?
Toyota is of interest at the moment but if there is a general answer that would be useful.
Are there any other potential gotchas with financing as opposed to a cash transaction?
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Very generally speaking if you have a loan, in which something is used as collateral, the leader will likely require you to insure that collateral.
In your case that would be a car. Yes certainly a lender will require you to insure the vehicle that they finance (Toyota or otherwise). Of course, if you purchase a vehicle for cash (which is advisable anyway), then the insurance option is somewhat yours.
Some states may require that a certain amount of coverage is carried on a registered vehicle. However, you may be able to drop the collision, rental car, and other options from your policy saving you some money.
So you buy a new car for cash (K or so) and store the thing. What happens if the car suffers damage during storage? Are you willing to save a few dollars to have the loss of an asset? You will have to insure the thing in some way and I bet if you buy the proper policy the amount save will be very minimal.
Sure you could drop the road side assistance, rental car, and some other options, during your storage time but that probably will not amount to a lot of money.
Okay, definitive answer for this particular company (Toyota Finance) is (somewhat surprisingly, and glad I asked) it must be fully insured at all times, including liability, even if being stored.
I asked at a dealership and they answered "just fire and theft (of course)" but I ended up calling their finance department and the answer was the opposite. So there you go. Thanks for the answers (and for trying to talk me out of wasting money).
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