Buying a new car comes with ups and downs. There is nothing quite like pulling a new vehicle into the garage; that is until the first bill comes around. But is financing even an option if you are dealing with SR22 auto insurance at the moment?
There is no denying the fact that banks are more hesitant than ever to lend people money considering the economy. They are extremely timid to loan to people they feel cannot pay the money back. To fully understand the lending process, you need to know what goes into financing a vehicle.
When looking for help from a bank or credit union technically they own the car until the loan has been paid in full. Of course, the lender wants to make you they get their money back which is why they go above and beyond to ensure you are financially fit to purchase a vehicle. But on top of this, they want to know the vehicle is protected against damage that could reduce the value of the vehicle.
This is where SR22 auto insurance comes into play. Often times if you have filed SR22 it is because of some ding against your driving record. Whether it is a DUI, multiple driving offenses or some other major citation, it doesn’t sit well with lenders.
When financing or leasing a new car, the lender wants to be listed as a first payee on the auto insurance policy. Despite the fact that you may be a liability having SR22 auto insurance, they surprisingly do not care much if this is the type of policy you have. The reason for this is because all they care about is protecting their investment, the car.
As long as you carry the proper amount of insurance to meet the requirements on the loan, you will be trusted by the bank or credit union itself. Just know that credit unions do require you to have full coverage. What this entails is having the liability insurance along with comprehensive and collision coverage.
As you might imagine, this can all become quite pricey at the end of the day. And that is where it becomes not as much fun as you may have first thought when purchasing that brand new vehicle. But it all comes with the territory of having SR22 auto insurance.
When it all comes down to getting financed, having SR22 auto insurance is not what you need to worry about. You should have no problem getting financed. The real problem will be the high insurance premiums you will be expected to meet with the need to have full coverage in order to remain trusted by lenders.