I just had an argument with my friend regarding his car and insurance.
He purchased a bmw 650 2 years ago and is still making payment. Due to some traffice violations, his insurance went up to almost 2500 for 6 months. I told him to put the car into storage and cancel the policy. He keeps saying that if he cancel the policy the bank will come repo the car. Is that true?
If he parks his car inside his gargage and still makes monthly payment, I don't see why the bank would do that.
Anyone here has any experience on this?

Many finance contracts that use the vehicle itself as collateral require people to carry full insurance coverage until the vehicle is completely paid off. This protects the finance company, as if the person doesn't carry insurance and the car/bike is stolen or wrecked, if the individual doesn't have many other assets the bank would otherwise be screwed. If he still owes on the loan and he is required to have insurance on it, if he stops his insurance the bank is well within their rights to repo it immediately.

But your question is will they. I think it depends. Sometimes the communication between the insurance companies and the lienholder is very quick, sometimes it's not so quick. No guarantees on when it would happen, but there's a reasonable chance that it would eventually come to pass.

I just had an argument with my friend regarding his car and insurance.
He purchased a bmw 650 2 years ago and is still making payment. Due to some traffice violations, his insurance went up to almost 2500 for 6 months. I told him to put the car into storage and cancel the policy. He keeps saying that if he cancel the policy the bank will come repo the car. Is that true?
If he parks his car inside his gargage and still makes monthly payment, I don't see why the bank would do that.
Anyone here has any experience on this?

If the car is financed, whoever financed it will require insurance, at least as far as my experience goes. As far as will they repo, no idea, but it wouldn't surprise me. The bank wants to make sure that if something happens to it they will get their money back. IMHO, your friend doesn't really have a lot of options, pay the higher rate or sale the car, or maybe look around and see if there is cheaper insurance somewhere else.

just my 2c

nb

If the car did go up for repo, it would probably never be taken. If he keeps it in the garage and keeps the garage door closed, then there's nothing they can do. Repo men are not allowed to open garage doors, back yard gates, etc.
Do they all follow the rules? no. But if it's in the garage, they aren't getting it.

That's how it is in Florida at least. My friend repoed cars for a few years and I went with him a few times. Don't believe the BS shows on tv, they are so far from the truth....it's actually a very boring job.

Bank could put there high priced insurance on it, and add it to the payments.

Even if they can't get to it to take it away, they can file an injunction against it to keep you from getting it registered come renewal time.

Also, to avoid any hastle, MOST auto loans have fine print that allows the finance company to call the loan due in full or return of the collateral anytime that you viloate any of the terms of the loan agreement, including dropping insurance.

At that point, you're screwed, and they can then have the local sherrif sieze the property, or haul you in front of a judge to get possesion of said property.

Just had a Sailor at my command go through this very situation where he "stored" his car for a 6 month deployment and dropped insurance for the vehicle during that time. Bank said NO NO, and called the loan due because this kid had a history of "stolen vehicle" claims on his insurance.

Got a summons to court, refused to surrender the vehicle or get insurance until he "wanted to", so they held him in contempt of court for three days until he decided to surrender the car.

Easiest way to figure this out is to call the bank. Much easier and quicker than creating a thread about it. No offence. They probably do require the insurance, or to sell the bike would be a good option.

I think it depends on who you are financed with. On my car im not even required to have insurance on it. Im required to have insurance on my bike, but I had it for almost a month before I took out a policy on it, I still have yet to fax any proof of insurance to them, and I have yet to see a repo man.

I have never had to fax anything to my loan company ever (ive had 3 car loans and my bike loan). I think it is different because I am in the military. Usually we get creadit very easy, because all they have to do is notify our commander and our wages will be garnished (at least that is what I hear). This fact (along with the desire to keemy my good credit rating up) is what keeps me from buying too much.

If the car is financed or leased the bank will require a certain amount of insurance on the vehicle. In my experience with Wells Fargo there was a miss-communication when my policy on my car auto-renewed and they apparently didn't get the info. So several months later I discovered that they had tried to reach me a few times to clear things. However, since I hadn't responded they tacked on their own insurance for the car and added it to my monthly statement. It took me nearly 4 months to finally get it cleared up and get the credit for the normal payments I was making returned to my loan account.

Also some states, like Pennsylvania, will suspend your registration if the vehicle is not insured regardless of the situation. As others have said he can either take his punishment by paying the higher amount, shop around for a cheaper insurance, or sell the car. This will definitely be a major learning experience for him and help make him a better driver. When it starts hurting you wallet to the point he's at, you find yourself making a choice to be more alert and do more to avoid getting any more violations.

If the car did go up for repo, it would probably never be taken. If he keeps it in the garage and keeps the garage door closed, then there's nothing they can do. Repo men are not allowed to open garage doors, back yard gates, etc.
Do they all follow the rules? no. But if it's in the garage, they aren't getting it.

That's how it is in Florida at least. My friend repoed cars for a few years and I went with him a few times. Don't believe the BS shows on tv, they are so far from the truth....it's actually a very boring job.

:rotflmao:

I wish that was the case whenever I was working with a repo company before I joined the AF. Boring? Sometimes, but whenever the sun went down is when it got interesting. I worked 18+ hour days some times. A lot more often than not we got the cars we were contracted for. Your FL repo men are lazy. :p

We always found a way to get the car we wanted. :D Some times it just involved a lot of BS'ing people.

As for the OP's post, his buddy should just call the bank. A lot of times banks can be friendly and understanding and try to help him out. They lose money contracting the car out for repo. Better to work with the buyer and still get paid than pay to repo a car and find a way to sell it again.

Probably...or he was just lazy because he ended up quitting because he wasn't making enough money (commission per car). He was doing the whole 12+ hours a day, sometimes 18...doing somehting like 70-80 hours a week and not making nearly enough for the amount of hours.

But like you said, it was a lot of BSing people when he did get a car. There was almost never any confrontations or angry people, just people begging you to keep there car, or people swearing they made the payments and the bank is mistaken. It just seemed to get old and boring after a while when you could literally amost predict what the person would say.


Anyways, on topic...I agree with the post to call the lender and talk it over to try to find a solution.

I am sorry but... For that kind of car I would want to keep it insured even if it was garaged. I mean think about it. If something happens to the garage! There is only so much a storage unit will cover.

Have your friend shop around for car insurance. Make sure he is getting the best plan he can. See if that works out a little better.

Besides... Why coop up a car like that!? How is that fair to it?

If he parks and car and keep comprehensive insurance it's going to be pretty cheap..dollars a month..collision and 3rd party liability is what is costly... The bank just want to be sure they have "their" protected in case they have to recoup their money by repoing the car (and it it's trashed, its not good).

...or he can get his car loan consolidated, then his car is totally his and can you whatever he wants with insurance. I always to pay my vehicles with personal loans/credit so I don't have to go through the pain of paying colision lol.