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I used my car as collateral to consolidate my debt. The car broke down but they say I have to keep insurance on it. Please help
Atlanta, GA
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Posted 7 months ago in Debt / Lending Agreements
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I used the car as collateral explaining to the representative the car was on its last leg and was going to use the money they were giving me to buy a new car. I bought the new car and cannot afford insurance on both. The loan is for 4 years and the insurance they are adding will cost an extra 58 dollars a month which I truly cannot afford right now. My store closed and I am bringing home a lot less money. Needless to say the company i chose to use will not help me saying I do not qualify for another loan my debt to income ratio is to high. Even so I do not want to get a new loan because I do not want to pay interest twice. None of this was explained to me properly and I fell that something should be done because I told them I was buying a new car with the money they were giving me.
Answers (2)
Robin Mashal
This attorney is licensed in California.
Posted 7 months ago.
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Disclaimer: The materials provided below are informational and should not be relied upon as legal advice. I am licensed in California and the materials below are based on California law.
The answer will depend on the terms of your contract with them. Real the contract carefully. If the contract requires you to keep the car insured, then you probably will need to maintain insurance on it. Have you tried shopping around for more affordable auto insurance that will satisfy the requirements of this contract? You should consult an attorney licensed in your jurisdiction to protect your legal rights. 
Glen Edward Ashman
This attorney is licensed in Georgia.
Posted 7 months ago.
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Every car loan requires you to maintain insurance, and no one is obligated to read the car contract to you. When you buy a car, you need to take time to read everything before you sign. You'll see this obligation clearly in your paperwork. If you don't buy insurance, they will buy insurance and bill you, and can repossess the car. (Their insurance does not protect you and it wil cost more than what you can buy).
If you cannot afford your obligations, you may want to talk to a bankruptcy lawyer to review possible options. |
