Can I buy insurance for a financed car by myself in the second year?
3 Answers
Whether you can buy insurance for a financed car in the second year depends on the terms specified in the car purchase contract. Here are the details about purchasing insurance for a financed car in the second year: 1. Some 4S stores may stipulate in the purchase contract that during the loan repayment period, the owner cannot choose the insurance company and must purchase insurance from a 4S store-certified insurer. On one hand, this is because the 4S store has a partnership with the insurance company and can profit from it. On the other hand, purchasing insurance from the designated insurer reduces the 4S store's own risks. 2. If there are no such stipulations in the contract, the owner can purchase insurance independently. Typically, third-party liability insurance, no-deductible coverage, water damage insurance, and vehicle loss insurance are more practical options.
When it came time to renew the insurance for my financed car in the second year, I also considered whether I could find an insurance company on my own. To be honest, it depends on what the loan contract specifies. At that time, I pulled out the documents and carefully reviewed the terms, only to find that the bank required comprehensive coverage and listed them as the beneficiary. I called the account manager to confirm, and they said I could switch insurance companies but had to report it in advance. In the end, I compared options and chose a cheaper one, immediately scanning and sending the policy to them for archiving once I received it. The whole process wasn’t actually difficult—the key is to communicate in advance and not act on your own, otherwise it might count as a breach of contract and affect your credit record. Nowadays, many financial institutions allow you to handle insurance filings through their mobile apps, which is much more convenient than visiting the counter in person.
Attention to friends who purchase cars with loans, it is indeed possible to buy insurance yourself in the second year, but don't be too casual. Last year, my colleague opted for the cheapest insurance with the lowest coverage to save money, and the bank directly sent a warning letter stating it violated the mortgage terms. The core issue is that the vehicle is still mortgaged. Financial institutions usually require you to purchase comprehensive insurance like collision and theft coverage to mitigate risks, and they must be listed as the first beneficiary. My advice is to first call the official customer service to clarify the specific requirements. Some institutions allow self-purchasing but require using their partnered system to issue the policy, while others specify a list of approved insurance companies. Don't risk saving a few hundred bucks—if an accident occurs, the insurance payout might go directly to the bank, affecting your ability to repair the car.
