What do lenders do on a car loan with no car insurance?

Answer 1

The first thing that they will do is to put forced place coverage on the vehicle. This is a very expensive type of insurance that only protects the banks interest and only pays the bank. The premiums are added to your account and you are responsible for paying for the insurance. This insurance only provides physical damage coverage and will not pay for damage to your property or anyone Else's. It does not provide liability and does not meet the state requirement to allow it to be driven on the street. The second thing they will do is to repossess the vehicle because you have violated the contract that you signed with the lender to keep the required coverage on the vehicle. Oh yes, and the cost of impounding and storing the vehicle after it has been repossessed will also be charged to your account.