Do You Need Full Coverage on a Used Financed Car?

2021 RAM 1500 Front View

We here at Allen Samuels Auto Group are proud to make the car financing process easy and hassle-free. We also want to help you answer any questions you have about automotive financing, including whether or not you need full coverage on a used financed car. That’s because many of our customers ask, “Do you need full coverage on a used financed car?” Generally, state laws do not require full coverage for financed vehicles, but lenders do in fact require it to protect their financial interest. Read on or contact us to learn more.

Financing a Used Car: The Facts

In most states, you don’t need to purchase full coverage, even if you’re buying a new vehicle, let alone a used vehicle. But here’s the clincher: if you finance a vehicle, new or used, most lenders will require you to have full insurance coverage. That’s because financial institutions want to protect their financial interest in your vehicle. If you buy a used car for cash, you can very likely skip the full coverage, if you so desire.

The finance agreement you agree to when you apply for a loan and sign all your paperwork should mention how many years you’ll pay off the vehicle until you receive a title and own it outright. Until the time your car is paid off, generally, the lender holds onto the title. Generally, a lender will require that full coverage remains active until such time that the vehicle is fully paid off.

How Many Years Can You Finance a Used Car?

In addition to wondering if full coverage is required on a used car, many of our customers also inquire about how many years they can finance their used vehicle purchase. Generally, lenders offer financing options that vary between 2 years to around 8 years (24 months to about 96 months). When applying for financing, you’ll need to bring these items:

  • Valid Driver’s License
  • Valid Car Insurance Card
  • Any supporting financial documentation (i.e. last two pay stubs)
  • Any existing vehicle documentation for your current vehicle (if applicable)

Once you get matched with a lender and a loan, the friendly finance team here at Allen Samuels Auto Group will run through what the terms of the loan are. Plus, if you have any questions about how much you should put down, what your trade is worth, or just about anything else, our team can help!

Apply for Financing Online or Contact Us Now!

Ready to get started on the process of vehicle ownership? Use our online payment calculator to see how much your next purchase could be, then visit one of our dealerships in-person to get the ball rolling on your finance application or apply online at your preferred dealer!

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