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Why do financed vehicles get repossessed?
Could your vehicle get repossessed for not having insurance? Or is it only because you don't pay your loan?
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“The most common reason why a financed vehicle would be repossessed is due to missed loan payments.
While it is
illegal in most states
, dangerous, and likely against your contract to not have insurance, vehicles typically aren’t repossessed because of it. If lenders discover you don’t have insurance, they’ll likely place forced coverage on your vehicle. This
car insurance
is often significantly more expensive than if you kept your own insurance on your car. The monthly cost are usually added to your loan balance as well. However, every lender is different. You should review your loan contract if you have any questions about it. The terms and conditions should clearly state reasons why a vehicle may be repossessed.
It’s important to be aware as any time you’re in violation of your contract, your vehicle could be repossessed.”
View full answer
- Gregory R.
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