Car finance (loan) insurance requirements (store car)
"Okay, definitive answer for this particular company (Toyota Finance) is (somewhat surprisingly, and glad I asked) it must be fully insured at all times, including liability, even if being stored.  I asked at a dealership and they answered ""just fire and theft (of course)"" but I ended up calling their finance department and the answer was the opposite. So there you go. Thanks for the answers (and for trying to talk me out of wasting money)." Very generally speaking if you have a loan, in which something is used as collateral, the leader will likely require you to insure that collateral.   In your case that would be a car.  Yes certainly a lender will require you to insure the vehicle that they finance (Toyota or otherwise).  Of course, if you purchase a vehicle for cash (which is advisable anyway), then the insurance option is somewhat yours. Some states may require that a certain amount of coverage is carried on a registered vehicle.  However, you may be able to drop the collision, rental car, and other options from your policy saving you some money. So you buy a new car for cash ($25K or so) and store the thing.  What happens if the car suffers damage during storage?  Are you willing to save a few dollars to have the loss of an asset?  You will have to insure the thing in some way and I bet if you buy the proper policy the amount save will be very minimal. Sure you could drop the road side assistance, rental car, and some other options, during your storage time but that probably will not amount to a lot of money.
It's to legally allow you to buy/ sell securities on behalf of others and to give advice. Different tests allow different things. 66 is for the basics: stocks and bonds etc. I believe 31 is for insurance or something. I'm not too sure the specifics I'm probably wrong about which test is which though. I've had many home loans, and all have been sold to a big bank.  They have certain rules about how much insurance you need to have, but I've never had one buy insurance on my behalf - they always send letters telling me I need to increase the insurance.  They do say that if I don't get enough insurance, they will do it for me, but this has never been necessary. I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles.  However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed.  Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer.  Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot. Presumably you need a car to get to work, so let's start with the assumption that you need to buy something to replace the car you just lost. The biggest difficulty to overcome in buying a car is the concept of the monthly payment. Dealers will play games with all of the numbers to massage a monthly payment that the buyer can swallow, but this usually doesn't end up giving the customer the best deal. The 18 month term is not normal for a lease, typically you'll see 24 or 36 months. You are focusing on another goal of paying your student loans by then which would free up much more money for other wants (like a car) but at what cost? The big difficulty of personal finance is the mental mind game of delaying gratification for greater long-term benefit. You are focusing on paying your student loans now so that you can be free of that debt and have more flexibility for the future. Good. You're tempted to spend another $5400 (assuming no down-payment or other surprise fees) to drive a car for 18 months. That doesn't sound any wiser than $5,000 for an unreliable used car that gave you more problems than you bargained for. Presumably you got some percentage of that money back from the insurance company when the car was totaled, but even if not, the real lesson should be finding a car that you can afford up-front, but also one that you can still use when the loan is paid off (like your education--that investment will keep giving even when the loans are a distant memory). My advice would be to look for a car that has about 30k miles on it and pay for it as quickly as possible, then drive it at least for 70-120k more miles before replacing it. You may wish for a newer car, especially in 3 or 4 more years when it starts to show its age, but you'll also thank yourself when you can buy a newer better car with cash and break out of the monthly payment game that dealers try to push on you. You might even enjoy negotiating with car salesmen when you see through their manipulations and simply work for the best cash price you can get. Some things you missed in your analysis:   How will financing change your insurance costs?  I.e. what is the difference between the insurance that you would buy for yourself and what they require?   Note that it is possible that your insurance preferences are more stringent than the financing company's.  If so, this isn't a big deal.  But what's important is to consider if that's true.  Because if you'd prefer to drive with only the legal minimum insurance and they insist that you have full coverage with no more than a $1000 deductible, that's a significant difference.   Remember that you don't have $22.5k for six years.  You have an average of $10.5k (($22.5k + -$1500)/2) for six years.  Because you make payments ($24k) throughout.  So you start with $22.5k and subtract $333.33 a month until you reach -$1500.  That neglects both investment gains and potential losses.   It's not the $333 payment that will freak out mortgage companies.  It's the $24k debt.  But that's offset by your $22.5k in assets at the beginning.  And the car of course counts as an asset, albeit at lower than its sale value.  I.e. from the bank's perspective, paying $22.5k for a car out of savings is almost as bad as borrowing $24k for a car.  Both reduce your net worth.   Watch out for hidden fees.  In particular, 0% interest can often change into higher interest under certain circumstances.   If we assume a 7% return for the six years, that's about $1400 the first year and less each year after.  Perhaps $4500 over six years.  But you aren't going to get a 7% return if you keep $24,000 in a bank account in case you have to pay off the loan.  Instead, you'll get more like 1%, less than inflation.  Even five year Certificates of Deposit are only about 2%, right around inflation (1.9% for previous twelve months).   You can't keep the $24,000 in a securities account and be sure that it will be there when you need it.  If the market crashes tomorrow, your $24,000 might be worth $12,000 instead.  You'd have to throw in extra money from elsewhere.  Instead of making $4500 at the cost of $1500, you'd have paid $25,500 for $12,000.  Not a good deal.  So for your plan to work, that $24,000 needs to be in an account that won't fall in value.   You either need to compromise on the idea of a separate account that is always there when you need it, or you have to accept rather low returns.   Personally, I would prefer not to have the debt and not to pay extra on the insurance.  But that's me.  The potential investment returns are not worth it to me.  If you give up the separate account, you can make a few thousand dollars more.  But your risk is higher. "Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the ""primary"", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't ""purchase"" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank." Apart from legal requirements to have insurance, e.g. 3rd party car that other answers have covered well. We can think of all insurance as protecting our “usable” income, as we can use cashflow to pay the costs of a loan to replace whatever we decided not to insure.    So for example, if I don’t insure my house contents, I can replace them on my credit card if needed. Therefore we are paying for insurance out of our income, so as to protect our income, knowing that the cost of the protection is on average more than the benefit we get from it. But we all know that having an income of $50K is less than double the value of having an income of $25K.   (E.g. being able to eat and remain warm is more important to us then being able to go on anther holiday.)  This is way when someone has a higher income; it requires more money to effect their actions. Loss aversion is another factor; we are people not logistical machines. "Auto loans are secured agains the car.  ""Signature"" loans, from a bank that knows and trusts you, are typically unsecured. Unsecured loans other than informal ones or these are fairly rare. Most lenders don't want to take the additional risk, or balance that risk with a high enough interest rate to make the unsecured loan unattractive." Personally I solve this by saving enough liquid capital (aka checking and savings) to cover pretty much everything for six months. But this is a bad habit. A better approach is to use budget tracking software to make virtual savings accounts and place payments every paycheck into them, in step with your budget. The biggest challenge you'll likely face is the initial implementation; if you're saving up for a semi-annual car insurance premium and you've got two months left, that's gonna make things difficult. In the best case scenario you already have a savings account, which you reapportion among your various lumpy expenses. This does mean you need to plan when it is you will actually buy that shiny new Macbook Pro, and stick to it for a number of months. Much more difficult than buying on credit. Especially since these retailers hate dealing in cash. I haven't looked at that warranty in detail, but generally speaking this should help. What is GAP insurance? In the case of a total loss/write off gap insurance covers the outstanding finance after your regular insurance pay out. The two won't match up usually because of the depreciation right after you buy the car. For example, if you take out $20,000 finance and buy a car, then write it off after six months, your insurance company may only value it at $16,000 but it's unlikely you will have cleared $4,000 from your finance. Gap insurance will pay out the difference and settle the debt. Will Chrysler change the engine, if it comes to bhore? Yes, unless they identify misuse or deliberate damage. For instance, if you do 1000 miles and the engine explodes, it's a mechanical fault that the warranty would cover. If they open up the engine/look at diagnostics and find it's been thrashed to within an inch of it's life, they may claim it was your driving which has destroyed the engine and you would have to prove it was an underlying fault and would have blown either way. Will car dents be covered with this bumper to bumper insurance? Not likely, as I mentioned in the last point, if it's your fault it wouldn't be covered. I think you may be confusing the terms insurance and warranty at this point. Insurance would cover your dents but a warranty only covers the manufacturer's faults, even in the case of extended warranties. What does basic mean in terms of warranty? Sounds obvious, but whatever Chrysler want it to mean! There's no legal definition of 'basic' so you would need to check the documents thoroughly or ask them to explain exactly what is and isn't covered. If they're reluctant, it's probably because 'basic' covers very little... In the UK at least, dealers definitely want you to take finance. They get benefits from the bank (which are not insubstantial) for doing this; these benefits translate directly to increased commission and internal rewards for the individual salesman. It's conceivable that the salesman will be less inclined to put himself out for you in any way by sweetening your deal as much as you'd like, if he's not going to get incentives out of it. Indeed, since he's taking a hit on his commission from you paying in cash, it's in his best interests to perhaps be firmer with you during price negotiation. So, will the salesman be frustrated with you if you choose to pay in cash? Yes, absolutely, though this may manifest in different ways. In some cases the dealer will offer to pay off the finance for you allowing you to pay directly in cash while the dealer still gets the bank referral reward, so that everyone wins. This is a behind-the-scenes secret in the industry which is not made public for obvious reasons (it's arguably verging on fraud). If the salesman likes you and trusts you then you may be able to get such an arrangement. If this does not seem likely to occur, I would not go out of my way to disclose that I am planning to pay with cash. That being said, you'll usually be asked very early on whether you are seeking to pay cash or credit (the salesman wants to know for the reasons outlined above) and there is little use lying about it when you're shortly going to have to come clean anyway. Generally, banks will report your loan to at least one (if not all three) credit bureaus - although that is not required by law. The interest you're paying, in addition to your insurance isn't justifiable for building credit. I would recommend paying the car off and then perhaps applying for a secure credit card if you are worried about being rejected. Of course, since you have very little credit, applying for an unsecured card and getting rejected won't hurt you in the long run. If you are rejected, you can always go for a secured credit card the second time.  As I mentioned in my comments, it's better to show 6 months of on-time payments than to have no payment history at all. So if your goal is to secure an apartment near campus, I'm sure you're already a step ahead of the other students. Most people buy insurance because it is legally required to own a car or to have a mortgage. People want to own homes and to have personal transportation enough that they are willing to pay for required insurance costs. There are a lot of great explanations here as to why insurance is important and I don't want to detract from those at all. However, if we're being honest, most people are not sophisticated enough to measure and hedge their various financial risks. They just want to own an home and to drive a car. Car dealers as well as boat dealers, RV dealers, maybe farm vehicle dealers and other asset types make deals with banks and finance companies to they can make loans to buyers. They may be paying the interest to the finance companies so they can offer a 0% loan to the retail customer for all or part of the loan term.  Neither the finance company nor the dealer wants to make such loans to people who are likely to default. Such customers will not be offered this kind of financing. But remember too that these loans are secured by the asset - the car - which is also insured. But the dealer or the finance company holds that asset as collateral that they can seize to repay the loan. So the finance company gets paid off and the dealer keeps the profit he made selling the car. So these loans are designed to ensure the dealer nor the finance company looses much. These are called asset finance loans because there is always an asset (the car) to use as collateral. "I am trying to set up a formula that will find interest-rate behind first pencil sheets at car dealerships. I am not a car finance expert so I need someone who is intimate with how these loans really work.   The points of data I get at first pencil are: 1) Amount Financed 2) Period 3) Monthly Payment  The data I need to extrapolate: 1) Rate in percentile so that I can compare to my bank's offer.  I have tried this and many other stock ""find rate"" formulas with no accurate results: R=(A/P^(1/n)-1)n"