Do You Need Full Coverage on a Used Financed Car?

Pre-Owned Vehicles

It doesn’t need to be frustrating to finance a used car. Here at Don Johnson Motors, our expert team helps to facilitate all of your needs. We want to keep you excited about the car-buying process, and make every part of it as easy as possible for Rice Lake customers. 

If you find yourself asking “Do you need full coverage on a used financed car?” then this guide is for you. The answer can depend on your circumstances, but usually it’s yes. Our finance team will break down each step in the process of buying a used car so that you can learn how to finance a used car, the ins and outs of insurance coverage on used cars, and more. 

How to Finance a Used Car: The Facts

In most states, you aren’t legally required to have full insurance coverage when you drive your car off the lot. It doesn’t matter whether it’s new or used. So, do you need full coverage on a used financed car? Well, it depends on your finance lender. 

Finance lenders want to secure their investments so that they don’t lose money. That’s part of why they require you to have full coverage on any financed car, whether used or new. Otherwise, an accident could put both you and the lender in a bad situation. 

When you finance a vehicle, you sign a contract with term agreements. Those agreements spell out just how long you’ll have to pay the lender until you can receive the title of the car. For example, let’s say you apply for financing at a Hayward dealership and obtain a loan for a used vehicle with a term of 36 months. Once 36 months have passed, the lender will have to give you the vehicle’s title. 

Since the lender still has the title of the car, that means that legally it’s technically “theirs.” The rationale behind this is that, since you’ve paid so little for the car, anything that happens to it hurts them more. This is why you need full coverage insurance during the term before they give you the title. In the example given above, that would mean your used car would have full coverage insurance for the 36 month period.

How Many Years Can You Finance a Used Car? 

Once you’ve chosen your next used and reliable car at Don Johnson Motors near Hayward, you’ll have to give some information to our finance team so that they can find a lender for you. This will start the car buying process. This information will be:

  • 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)

But, how many years can you finance a used car? That will depend on your financial situation. Once you’ve been paired with a lender, you’ll find out the terms the lender is offering in order for you to finance your used cars. Your credit score and what you can put as a down payment will change the length of your finance period. 

Come to Don Johnson Motors to Finance a Used Car

The right team can make buying a used car a breeze. The team at Don Johnson Motors is here to help you every step of the way! If you still have questions about financing your used car, don’t hesitate to contact us, or come to Rice Lake and visit us in person.

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