I’m looking into a rent-to-own car and want to get full coverage insurance with a $1,000 deductible. However, the dealership said I can’t have that deductible because they’re the lien holder; instead, they only allow a $500 deductible. I don’t understand this policy.
My main concern is making sure that if something happens to the vehicle—God forbid—the insurance will cover it, allowing me to get another car. Right now, my car note is $250 every two weeks, plus an additional $80 for collision insurance. I currently have liability coverage, but I want to find ways to lower my bills.
It seems like the dealership is more focused on their position as the lien holder than on my peace of mind. I want to drop my insurance costs significantly, and having a $1,000 deductible would help reduce my payments by nearly $200 every two weeks. If something did happen to the car, at least I’d have some cash to put toward a new vehicle.
If anyone has insight into this situation or advice, I’d really appreciate it. Apologies for any typos; I’m using voice-to-text. The dealership keeps emphasizing their role as the lien holder, and I’m just trying to understand why this restriction exists.
It sounds like you’re in a frustrating situation, and I can understand why you’re concerned about your insurance options. When you’re renting to own a car, the dealership or financing company often requires specific insurance coverage, including a lower deductible, to protect their interests as the lienholder.
Here are some reasons why they might be insisting on a $500 deductible instead of allowing you to choose $1,000:
Risk Management: The lienholder wants to minimize their risk. In the case of an accident, a lower deductible means that the insurance payout will be quicker and easier for them to collect, ensuring that their investment is secured more rapidly.
Financial Protection: With a lower deductible, if something happens to the car, you’re likely to get a larger portion of the car’s value covered, which protects the lienholder’s asset. They want to ensure that if the vehicle is totaled, the insurance can cover what is owed on the car.
Policy Requirements: It may be standard practice with that lender to require a specific level of coverage and deductible for their financed vehicles. This could be part of their lending criteria.
If you are looking to make your bills cheaper, you may want to discuss other ways to save on insurance, such as shopping around for better rates, looking into discounts (like safe driver or multi-policy discounts), or possibly adjusting your coverage in other areas. Additionally, you could explore if changing the terms of your financing agreement to allow for a higher deductible is possible after some time has passed or if you improve your credit score.
Communicating openly with the lender about your concerns might help as well. They could clarify why this requirement is in place and whether there is any room for negotiation based on your payment history and current situation.
If you have any other questions or need more clarification, feel free to ask!