How Clarington Auto Pawn Loans Affect Car Insurance? - Instant Loans Canada

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How Clarington Auto Pawn Loans Affect Car Insurance?

Feb 01, 2014

It is very important to have car insurance for your vehicle. It cushions unexpected expenses relating to car accidents or faulty machineries. When you have car insurance, you don’t have to worry about the fees you will pay when your car gets damaged since your insurance company will take care of it. As to the type of insurance policy you will get for your vehicle, you have full control. However, this is not the case whenever a Clarington auto pawn loan is already involved.

Facts About How Clarington Auto Pawn Loans Affect Car Insurance 

Certainly, there are circumstances that are beyond our control. These scenarios are very evident when we encounter financial emergencies. As many of us don’t have enough savings to cover these finances, we tend to resort to drastic measures and among them are car title loans.

I am not saying that Clarington auto pawn loans are disadvantageous. What I want to tell you is that it is a financial remedy which is not ordinary. Being so, there are certain facts (read below) you have to know with regards to this financial remedy specifically when dealing with car insurances.

  • Car Title Loans Means Lien Over The Vehicle. When you resort to a car title loan to solve a financial emergency, what you do is submit your car as collateral for the loan. This means that the lender will have a lien over the car. A lien is a claim the lender has over a certain property used as security for the payment of a debt. This means that if you cannot repay the loan back according to the terms and conditions that was agreed upon, the lender who has a lien over such vehicle has the right to take it away from you – a process called as repossession.
  • Lien Holder Has Superior Rights Over You. All the time, unless you have fully paid your debt, your lender’s rights are superior over yours when it comes to the vehicle. This is the reason why you always have to consider your lender’s needs and wants when it comes to car insurance coverage. Unlike when your vehicle has no lien, you won’t have a say as to the type of insurance coverage you will get for your car. You have to keep in mind what your car title loan lender wants. Oftentimes, car title loan lenders would require you to get a more expensive car insurance just to protect their interest over the property. This is a consequence you have to take seriously since it means that you will spend more.

These two factors are the reasons why you really have to reconsider your decision of getting Clarington auto pawn loan as often as possible. Keep in mind that a wrong move can bring you repercussions. Always weigh whether you would get more benefits rather than risks.