Taking car off the road, but still owe bank, agent orders: 'keep paying insurance'?

[fastcar]

Hey gang,

I'm looking ahead, and have already started seeking a good winter beater. Spotted an 87 CV for around $500, and may go for it. So...

I phoned my insurance agent, and she told me 'No, you can't take the MM off the road, you still owe money on it. You must keep it insured'.

I put down the phone, but now I'm thinking, 'If it sits on blocks in my yard, I should only need fire and theft for it - no liability, especially if I cancel the registration.'

Does anyone have any experience with this situation??? Liability and collision should be the lion's share of the premium. I DON'T WANT TO PAY IT! Help me!:bigcry:

[MERCMAN]

I believe that when you signed the note from the bank, you also agreed to carry full coverage on the vehicle for the life of the loan. Check your loan papers

[BruteForce]

Check your loan note. I'll bet it states it has to be fully insured. Most do as it protects the collateral for the loan.



Hey gang,

I'm looking ahead, and have already started seeking a good winter beater. Spotted an 87 CV for around $500, and may go for it. So...

I phoned my insurance agent, and she told me 'No, you can't take the MM off the road, you still owe money on it. You must keep it insured'.

I put down the phone, but now I'm thinking, 'If it sits on blocks in my yard, I should only need fire and theft for it - no liability, especially if I cancel the registration.'

Does anyone have any experience with this situation??? Liability and collision should be the lion's share of the premium. I DON'T WANT TO PAY IT! Help me!:bigcry:

[stillprint]

As long as your car has a lien holder it REQUIRES full coverage, even if you're not going to drive it. The reason is that in case anything happens to the vehicle, the lein holder doesn't lose money, or in your case, a vehicle they're essentially letting you drive until you pay them all their money.

[rlbforum]

As others have said, since you owe money they require you to keep full insurance. If you can work with your agent, get a really high deductible since you won't be driving it. It will bring your premiums down.

I have to do this with my mustang for winter storage.

[MM03MOK]

Compulsory (required)
http://www.mass.gov/?pageID=ocaterminal&L=4&L0=Home&L1=Consumer&L2=Insurance&L3=Automobile+Insurance&sid=Eoca&b=terminalcontent&f=doi_Consumer_WaysToSave_Comp ulsory&csid=Eoca

Optional
http://www.mass.gov/?pageID=ocaterminal&L=4&L0=Home&L1=Consumer&L2=Insurance&L3=Automobile+Insurance&sid=Eoca&b=terminalcontent&f=doi_Consumer_WaysToSave_Opti onal&csid=Eoca

[MarauderSM]

You guys teach me something new everyday.

[BAD MERC]

Try collector car insurance like Grundy Worldwide. They insured my Marauder at a stated loss value of $40,000 for $520 a YEAR! I still have a lien.

[fastcar]

Thanks gang,

I will look at the note. But if they make me carry FULL coverage, that would not be fair.

I could cancel the registration, and pay fire and theft, since I won't be driving it. That would make more sense to me. The only risk becomes if it burns, or is stolen.

Maybe they are afraid if the owner cheats, and takes it for a spin, then they would be SOL. I'm thinking out loud, here, trying to make sense of it...

fastcar:burnout:

[MinnesotaMuscle]

I put my Trans Am on "storage insurance" back when it had a lien on it, and the bank allowed it. go it sit down with your loan officer, explain you will be keeping it in a well built heated garage for the winter. Allot of the dealings I have had, they will allow it, might cut you a break if you have some equity in it.....never hurts to ask is my moto.....
<o:p> </o:p>
<o:p> </o:p>

[FormulaMarauder]

I dont see why you are panicking. Most insurance companies quotes go down when you insure more than one vehicle.

[Raudermaster]

It's simple, if you owe money, you can't take it off insurance, I already tried.

[larryo340]

I put my Trans Am on "storage insurance" back when it had a lien on it, and the bank allowed it. go it sit down with your loan officer, explain you will be keeping it in a well built heated garage for the winter. Allot of the dealings I have had, they will allow it, might cut you a break if you have some equity in it.....never hurts to ask is my moto.....
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<o:p></o:p>
^^^^^^^^+1

[RCSignals]

As has been said, some form of insurance is going to be required by the lender.
If the car is registered and licensed for the road the lender is more than likely going to take the attitude that you could still drive it even if you declare it off the road and in storage.

[Jon01]

I pull everything but comp off of the GTO every Oct-April when it's put away. Bank is none the wiser, I just don't have them listed as holding the title with my agent.
I don't drive it and it's covered if anything happens to it other than me being dumb and driving it and having an accident.
BUT, if you have to continually send the bank proof of insurance or have them listed with your insurance co as the lienholder you won't be able to get away with it.
There's

[Aren Jay]

You could put a huge deductable on it, keep full coverage and get the least amount of liability possible.

Say $5000 deductable and 300,000 Liability, as long as you park it so that it won't roll over 15 tourists or something.

Make sure it is designated for pleasure use only.

Just don't ever stop having insurance even if you don't have a car, you lose all your built-up benefits.

Same applies if you go over seas and have insurance in Europe for instance, when I came back to Canada I started over as a new driver.

[MACFORD88]

I Have A 1000.00 Ded On Mine.i Pay 800.00 A Year From Farmers.i Have Had My Mm For 9 Mon And Only Log On 1k On The Clock So Far.

[sailsmen]

Lay it up, cancel the registration and buy COMPREHENSIVE.

U will not be covered for Collision.

In the unlikely event the Bank contacts u send them the cancelled registration and COMPREHENSIVE.

If the Bank will not accept it. Add Collision.

Wait 30 days then raise your Collision deductible to the highest available.
Most agents will not notify the bank for a change in deductible.

When banks have told me I must have a certain ded I tell them no, u loaned me the $ to buy a $35K car and then u are going to tell what ded?

[Mike Poore]

It's always easy to beat up on the insurance companies, but look to your state legislators if you're trying to place blame. Consequently the rules change from state to state, with the backward or forward thinking ones (depending upon your point of view) requiring no insurance whatsoever, or everything to include running over a chipmunk.

We bought a '93 special edition Mustang, new, stored it, and from showing, over the years, have just under 4,000 miles on the speedo. It's got a 225HP 5.0 with automatic, considered anemic by today's standards, and yet the car's subject to high performance rates.

We have a 6 month put-up clause, which saves about 20% in premiums. We could send in the plates, and re-register every year, but then they'd charge us 6% PA sales tax each time.

Of course, if it ever was destroyed, the insurance company would allow average wholesale replacement cost.

[fastcar]

Lay it up, cancel the registration and buy COMPREHENSIVE.

U will not be covered for Collision.

In the unlikely event the Bank contacts u send them the cancelled registration and COMPREHENSIVE.

If the Bank will not accept it. Add Collision.

Wait 30 days then raise your Collision deductible to the highest available.
Most agents will not notify the bank for a change in deductible.

When banks have told me I must have a certain ded I tell them no, u loaned me the $ to buy a $35K car and then u are going to tell what ded?

sailsman,

I like your style!!! I think I'm going to try this out. I'll keep you all posted.

fastcar:burnout:

[Larry Durham]

Mine comes of the road and into storage Nov-May. I turn in the plates to my agent and tell them to keep the fire and thief ins. on and send me a cancelaton reciept, No problem! The ins. co. is Commerce and the lien holder is Citizens Bank. Savings is half of a years premium.
The term " Comperhensive " on your ins. policy means fire and thief which the leanholder will require, but if the car is not registered than Compulsory ins. is required because the car can not legally be driven on the road. Simple no plates, no ins.!
My agent does this for a lot of their clients including notifying the registry that they will hold plates in their possesion so the client doesn't lose that special number or vanity plate.

Solution- Get another agent!

[fastcar]

Mine comes of the road and into storage Nov-May. I turn in the plates to my agent and tell them to keep the fire and thief ins. on and send me a cancelaton reciept, No problem! The ins. co. is Commerce and the lien holder is Citizens Bank. Savings is half of a years premium.
The term " Comperhensive " on your ins. policy means fire and thief which the leanholder will require, but if the car is not registered than Compulsory ins. is required because the car can not legally be driven on the road. Simple no plates, no ins.!
My agent does this for a lot of their clients including notifying the registry that they will hold plates in their possesion so the client doesn't lose that special number or vanity plate.

Solution- Get another agent!

Larry,

Thank you so much for your suggestion. I am going to show this post to my agent! If she won't do it, if she refuses to put just comprehensive alone on it, I'll go to yours. I'm in MA, too!

fastcar

[fastcar]

Well, it finally snowed for real in lovely MA this past Sunday, and my Marauder tasted NO SALT, for I bought a WINTER BEATER, and drove that Monday AM :D

One problem: Monday morning my agent still refused to transfer the plate from the Marauder to the beater, and cancel the liability on the Marauder...

First, she said that Commerce would not sell just comprehensive for a vehicle, without liability. Then she got back to me and said they would and to come in. When I got there, she said, 'Wait, you still have a note on the MM, we can't do it' and the whole thing started over again :mad2:

I argued, and she asked a supervisor. He said that if I got a note from the Lender stating that comprehensive would suffice, then they would do it. I said, that's between me and the lender, and has nothing to do with you. She said 'sorry'.

Then I PM'd Larry, who was kind enough to give me his agent's name and number. I phoned them, (great office, open before 9!) and said they do it all the time, don't worry, they'd take care of me. Did explain that an odd lender may not allow it, but that she would process it for me.

I called my agent back and told her what I got, and that I didn't want to jump ship, but that she was forcing my hand, and that I would be damned if I was going to spend one red cent more on the policy for that vehicle than I needed to (ESP LIABILITY!)

So, she said let me get back to you. She calls back and says 'OK, we'll do it. Commerce said that it's between you and your lender and has no obligations to the lender.' I said: 'Now you're talking!' She said, expect a phone call from them stating you are in default do to insufficient coverage, I said 'bring it on, baby!' and she processed everything for me this afternoon.

So, my situation is that I'm waiting to see if the Lender notices or cares about the policy revision.

I'm basically going to follow Sailsmen's plan to a 't', going right down the list. I'm hoping if they call, they will accept just the addition of collision. If they try to jam liability down my throat, I may find another lender. Not sure yet...

Should be interesting. I'll keep you all posted. Thanks Larry!

fastcar:burnout:

[GreekGod]

As some have mentioned, state laws (and insurance coverage, with the same company) vary.

Also, what an agent tells you might not be what an insurance company will do! Agents can make mistakes, and some insurance companies could care less what an agent said or promised. That being said, a good & experienced agent is your best friend. A good insurance company is most important. Playing games to save a few dollars is not a good plan.

We MM owners must maintain an elitist image, and even boast about paying more than others for coverage. ;) After all, everyone knows a Mercury is a step up in class over a Ford (but still a step below a Lincoln)!

"The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory."- Aldo Gucci

[xopher]

fastcar, I hope you can get it worked out. For those still trying to work out the situation, here's my story. I have a lien with my local credit union, and insurance with American Family. A few Fridays ago, I drove my Marauder into storage, drove my beater to the credit union (Landmark in Wisconsin) and told them the Marauder was stored. They did some paperwork to append to the lien, removing me from my obligation to pay Collision, but I still have to pay Comprehensive for theft, vandalism, and hypertsunami. Called my insurance agent on my way out of the credit union and told them it was stored and I had no obligation for Collision, and AmFam dropped my Comprehensive to 8 bucks and some change per month. I'm insuring the beater with AmFam, which I'm sure helps with the discount, but it might work for you too!

[Vortech347]

Same thing with homes. If it has a lien against it they must have insurance. I put my mustang in "hybernation" and only carry comp on it. My buddy was a repo man and I'd go with him to repo cars that had no insurance.

[fastcar]

fastcar, I hope you can get it worked out. For those still trying to work out the situation, here's my story. I have a lien with my local credit union, and insurance with American Family. A few Fridays ago, I drove my Marauder into storage, drove my beater to the credit union (Landmark in Wisconsin) and told them the Marauder was stored. They did some paperwork to append to the lien, removing me from my obligation to pay Collision, but I still have to pay Comprehensive for theft, vandalism, and hypertsunami. Called my insurance agent on my way out of the credit union and told them it was stored and I had no obligation for Collision, and AmFam dropped my Comprehensive to 8 bucks and some change per month. I'm insuring the beater with AmFam, which I'm sure helps with the discount, but it might work for you too!

Wow, they actually changed the note to help you out. That is really cool. Not sure uptight New Englanders are going to do that for me. I'll just have to wait and see... Great idea. Thanks,

fastcar:burnout:

[fastcar]

Same thing with homes. If it has a lien against it they must have insurance. I put my mustang in "hybernation" and only carry comp on it. My buddy was a repo man and I'd go with him to repo cars that had no insurance.

Your lienholder apparently has no problem with that. I'm hoping mine won't, either. Did you look at your note? I'm really curious if the insurance clause only indicates comprehensive, or if it (like mine) states collision is required, as well...

Repo? YIKES:eek:

I realize that if I don't satisfy them, I will be 'in default' and this is sufficient for them to reposes.

fastcar:burnout:

[pantheroc]

I had to fill out a form for the lien holder telling them the exact time frame I was going to have the insurance for storage only.

[fastcar]

I had to fill out a form for the lien holder telling them the exact time frame I was going to have the insurance for storage only.

Very interesting. Hope my lender is as cool. I'd consider that getting off easy :) Thanks for the idea, too. If they get stingy, I'll try and suggest 'the form':D

fastcar:burnout:

[KillJoy]

I still owe on my car.

My agent will let me put it into a "suspense" mode for the Winter. Saves about $453 / half.

:up:

KillJoy

[fastcar]

I still owe on my car.

My agent will let me put it into a "suspense" mode for the Winter. Saves about $453 / half.

:up:

KillJoy

Thanks, Kill. But, do you have a note? That's an interesting idea, maybe it saves you from having to re-register it, etc. But my issue is more with the lender than the insurance agent, unless you were taking about the lending agent...

fastcar:burnout:

Whoops, just re-read your post. I see you still have a note. Apparently your agent isn't worried about your lender, in this case...

[KillJoy]

Thanks, Kill. But, do you have a note? That's an interesting idea, maybe it saves you from having to re-register it, etc. But my issue is more with the lender than the insurance agent, unless you were taking about the lending agent...

fastcar:burnout:

Whoops, just re-read your post. I see you still have a note. Apparently your agent isn't worried about your lender, in this case...


It is more of a case of Trust. He TRUSTS that I will leave the car in the Garage. IF I get it out of my driveway, and am involved in an accident, I am the one that would be screwed.

A good relationship w/ your Agent is a good thing to have. I like our guy because I call up and say "Howdy, this is Steve". They instantly know who I am. My parents have multiple policies through them. We do as well. He takes good care of me, and I pay for his extended vacations :D

:up:

KillJoy

[AzMarauder]

Thanks gang,

I will look at the note. But if they make me carry FULL coverage, that would not be fair.

I could cancel the registration, and pay fire and theft, since I won't be driving it. That would make more sense to me. The only risk becomes if it burns, or is stolen.

Maybe they are afraid if the owner cheats, and takes it for a spin, then they would be SOL. I'm thinking out loud, here, trying to make sense of it...

fastcar:burnout:

You hit the nail on the head.... if the owner cheats.... and it gets wrecked... they lose. Financial institutions won't take that risk.

[fastcar]

You hit the nail on the head.... if the owner cheats.... and it gets wrecked... they lose. Financial institutions won't take that risk.

That's fine with me. In fact, that's what I want. To assume the risk. But the lender doesn't want that. They want insurance. The question is, how much will satisfy them...

fastcar:burnout:

[AzMarauder]

It's always easy to beat up on the insurance companies, but look to your state legislators if you're trying to place blame. Consequently the rules change from state to state, with the backward or forward thinking ones (depending upon your point of view) requiring no insurance whatsoever, or everything to include running over a chipmunk.

We bought a '93 special edition Mustang, new, stored it, and from showing, over the years, have just under 4,000 miles on the speedo. It's got a 225HP 5.0 with automatic, considered anemic by today's standards, and yet the car's subject to high performance rates.

We have a 6 month put-up clause, which saves about 20% in premiums. We could send in the plates, and re-register every year, but then they'd charge us 6% PA sales tax each time.

Of course, if it ever was destroyed, the insurance company would allow average wholesale replacement cost.

Mike,

You should be able to work something out on the sales tax. If the car doesn't change hands how can they charge a sales tax? I had a similar problem in MA. years ago. All I had to do was get an exemption form and take it to the tax office and get it stamped. PITA but I could then put my 66 Mustang up each winter and not keep plates on it.

[AzMarauder]

That's fine with me. In fact, that's what I want. To assume the risk. But the lender doesn't want that. They want insurance. The question is, how much will satisfy them...

fastcar:burnout:

In the eyes of a financial institution the only way you could assume the "risk" is to post the money you owe on the car in some instrument that the institution could get if the car was wrecked.

[fastcar]

In the eyes of a financial institution the only way you could assume the "risk" is to post the money you owe on the car in some instrument that the institution could get if the car was wrecked.

True. Of course, if I could post the money, then I would pay off the note, and get out of the whole trap in the first place ;)

Honestly, though, if I turn in the plates, I don't see their liability risk. If I drive it, and hit someone, they won't have to pay, because I was driving an unregistered motor vehicle. The victims would have to sue me personally. And collision would cover the vehicle (collateral) so that the lender is OK. So, if the lender wants me to put collision on it, I will. But liability, I will fight tooth and nail. The car will be unregistered, or the plates turned into the insurance company. The car can not legally be driven, so the insurer or lender have no legal exposer, IMHO, if I go nuts and drive it into someone this winter with no plates on the car... BTW, liability isn't even for the lender's protection. It's for the protection of the citizenry. It's completely irrelevant.

fastcar:burnout:

[AzMarauder]

True. Of course, if I could post the money, then I would pay off the note, and get out of the whole trap in the first place ;)

Honestly, though, if I turn in the plates, I don't see their liability risk. If I drive it, and hit someone, they won't have to pay, because I was driving an unregistered motor vehicle. The victims would have to sue me personally. And collision would cover the vehicle (collateral) so that the lender is OK. So, if the lender wants me to put collision on it, I will. But liability, I will fight tooth and nail. The car will be unregistered, or the plates turned into the insurance company. The car can not legally be driven, so the insurer or lender have no legal exposer, IMHO, if I go nuts and drive it into someone this winter with no plates on the car... BTW, liability isn't even for the lender's protection. It's for the protection of the citizenry. It's completely irrelevant.

fastcar:burnout:

Oh I'm with you on the liability part! Actually I'm with you on the whole argument....

I have major issues with how insurance requirements go down anyway!

Good luck and hope it works out !

[whd507]

wow full coverage on my MM is about $20/mo (farmers) it wouldn't be worth my time to go through all that trouble to uninsure it or turn in plates. tags must be really expensive there too. ($58.50 for 2 yrs here)

mine is hiding out the winter too, but I like the option to move it around the neighborhood occasionally (no salt in the subdivision) and would be scared to de-insure it for any reason

[fastcar]

Well, it's been a week (since I cancelled liability and collision on the Marauder), and so far no phone calls or letters from my lender stating I'm in default. I think the next 2-3 weeks will be the most telling. If I make it past these, maybe my chances of squeaking by will be good :dunno:

fastcar;)

[Cordoba1]

If someone has a note on a car, owes a lot of money, it is insane to not be insured! The one thing I didn't see mentioned above was the possibility of theft or total loss due to catastrophe!

[ahess77]

OK, so here's an obvious solution to the hassle of not insuring the vehicle however you want, just pay it off. If you can't pay it off then you bought a vehicle that cost too much. Think about all the time you work to pay interest, all the hassle you've put into working with insurance agents and quotes, all the legalese you've read, etc. Debt is why American's cost-of-living is increasing and our quality-of-life is decreasing.

Think about if you owned everything you have. No mortgage, no car note, no credit cards, etc. How free would you feel? If you lost your job tomorrow, so what, you're not going to lose it all. It's a lifestyle you have to choose, and most Americans have chosen to be a slave to creditors.

Anyway, mine's paid off and I still carry comp during the winter when I park it in the garage.

[Aren Jay]

Wow glad to see that a fellow member has waken up and smelled the all ready paid for roses.

[fastcar]

If someone has a note on a car, owes a lot of money, it is insane to not be insured! The one thing I didn't see mentioned above was the possibility of theft or total loss due to catastrophe!

:confused:

Everyone who has posted on this thread has spoken of carrying 'comprehensive' during the winter (read 'fire and theft'). It's against the terms of the loan to not have reasonable protection.

fastcar:burnout:

[fastcar]

Think about all the time you work to pay interest, all the hassle you've put into working with insurance agents and quotes, all the legalese you've read, etc...

...and all the fun I'd be missing :D

fastcar:burnout:

[Cordoba1]

:confused:

Everyone who has posted on this thread has spoken of carrying 'comprehensive' during the winter (read 'fire and theft'). It's against the terms of the loan to not have reasonable protection.

fastcar:burnout:

What I meant was people were talking about taking their cars off the road and not wanting to pay for comprehensive coverage because of their assumption that nothing would go wrong! I was just indicating that, even if you're not actively driving the car, there is still the chance of major loss.

[Aren Jay]

Just ask Powerlabs on Nasioc. He comes home and some lady lost control of her mini van drove through his garage bounced off his subaru and crashed into the nieghbours house.

http://www.mercurymarauder.net/showcase/files/6/9/8/3/powerlabshouse1.jpg
http://www.mercurymarauder.net/showcase/files/6/9/8/3/powerlabshouse3.jpg
http://www.mercurymarauder.net/showcase/files/6/9/8/3/powerlabshouse2.jpg

It could have been your house, Your Marauder. Keep it insured.