Relatively recently, all vehicles that were bought on credit, had to go through compulsory insurance. That is, it is a CTP and a CASCO policy of damage / theft, which extended over the entire loan period. Insurance is considered one of the most expensive items for the borrower when the car is taken on credit. Because of this, a large number of banking organizations, attracting clients, tries not to mention the “pitfalls” of insurance, which are unlikely to be avoided.
Many credit institutions from the borrower wants to get an insurance policy on the item damage / theft. This requirement is dictated by certain conditions. First, the car is pledged to the bank. Secondly, this organization must compensate for possible risks. Therefore, the lender becomes the first beneficiary in the hijacking or constructive destruction of the vehicle.If we consider the risk of damage, as well as civil liability, the client of the bank can be considered the beneficiary.
Insure the car will have throughout the duration of the loan. This is done every year. The size of the interest rate on insurance is taken into account from the initial amount. You also need to understand that the car is aging every year and loses in value. Nothing can be done, but its cost is reduced. Thus, the amount of overpayment on the credit machine is equal to 300-400 dollars a year.
The cost of insurance is often higher when compared to noncredit machines. If you use basic insurance, the rate is reduced due to discounts (payment without installments, the use of a sticker, and more).
When you need to issue an insurance policy, it is done at the place of purchase of the vehicle.Insurance should not indicate the lower cost of the car. If the lender cooperates with insurance companies, an additional requirement may be made – policies under the program of voluntary and compulsory insurance need to be issued only in one organization.
For insurance of credit cars are used recommended by the lender of the company. The terms of the loan agreement, as a rule, stipulate that the bank establishes individual partners, taking into account the solvency of the company, experience in insurance services and terms of cooperation.
Recently, credit companies have significantly increased the number of accredited insurance agencies (sometimes around 10).
More favorable conditions for insuring one’s own risks are available from insurers that are accredited by the bank. Thus, a quality service is available to a person for the entire duration of the signed agreement.
Today, many banks offer their own customers a special offer, created together with insurance companies. The new product is called “Insurance on credit”. In this case, the contract questionnaire contains a clause stating that the insurance will be repaid under the terms of the loan. Banks, having approved the loan and having signed the agreement of sale and purchase of the car with the salon, sign the insurance. The lender receives a copy of it before issuing a loan. In addition, documents for the vehicle are properly prepared. Credit can be received only by a single payment. A certain part of the payment is sent to a car dealership and insurers.
A large number of “credit” banks declare that products where insurance is included in the value of the loan amount are in high demand. Basically, this applies to young people of moderate means. They earn good money, but there are no big savings.
Now banks attract customers in various ways. For example, no problem, you can get a loan to buy a car without insurance. In this situation, on which experts emphasize, the borrower will have to bear greater responsibility for such risks. When it comes to the product “Without insurance”, the borrower must determine the means of repayment of the loan, if the collateral object, which is the vehicle, is lost. Naturally, you need to examine each point of the insurance program. In this case, will help legal support of the transaction. However, this is an optional condition when the car is taken on credit.