Posted: Fri Jun 27, 2008 2:26 am Post subject: Can my lender force me to lower my deductibles?
I live in New York. I bought a 2004 Kia from a dealership, with a loan, about 2 years ago. When I insured the vehicle I went with a $1,000 deductible, which saved me a ton of money. Now just yesterday I get a letter from the loan company stating the deductibles on my comp. and collision are "too high", they must be lowered to $500. It took them TWO YEARS to discover this??
I do not want to lower the deductible to $500. It will greatly raise my premium beyond what my limited budget will allow. That is why I chose $1,000. OK, here are my questions:
1) What if I refuse to lower the deductible to $500. What can they "do to me"?
2) Would they have the right to repo my vehicle if I don't comply?
3) Do I have any options, or ways to work with the loan company on this?
4) In their letter, they state quote: "We REQUEST the deductible not exceed $500". Notice they didn't state demand, or similar wording, but 'request'.
5) The letter also says quote: "The information we have received regarding the insurance coverage on your account does not meet the requirements of the contract. Please call your agent or take the appropriate action necessary to correct the exceptions."
Any help or advice would be most appreciated...thanks. _________________ Register Now to have your Insurance queries solved.
jek, what made them change their mind suddenly? was there any change in your financial status in the recent past? That may have triggered the review of the loan agreement. _________________ Register Now to have your Insurance queries solved.
Hey, why not re-read the loan papers and see what do they mean by not meeting the loan contract requirements. It may also explain whether they can repo your car if you don't meet their conditions. _________________ Register Now to have your Insurance queries solved.
2) Would they have the right to repo my vehicle if I don't comply?
I don't think so. The lender can repossess the vehicle if you fail to repay the loan on time.
You have the option to shop for another lender if you don't want to comply with their condition. _________________ Register Now to have your Insurance queries solved.
First of all, the simple fact that you've had the car for two years before they eecide to spring this on you is pretty lame, so I understand your mood.
The problem is, it's all in the contract that you signed, and if it isn't in the contract- have you received any notices that alter the terms of your loan agreement for any reason? Depending on the terms of the contract, the lender can pretty much require the borrower to do almost anything that's legal in that state.
Altoona said:
Quote:
was there any change in your financial status in the recent past? That may have triggered the review of the loan agreement.
That's a good point. Again- depending on the terms, they could easily have the right to alter the terms. Normally, the insurance "rules" are in the dealership paperwork, and you probably signed a number of forms. You should still have copies of this paperwork- it's important. Somewhere buried in there you should find the insurance information. Oh yeah- don't forget that you signed for it.
As to why it took them two years to discover this is unfortunately not an uncommon thing. I've seen companies on way more than one occasion goof this stuff up. So, I feel for ya. Definitely affects the premium, so maybe now's a good time to shop around to see what $500 deducts cost with the competition compared to your carrier.
I have a suggestion, not sure it will work but it might...Ask your leinholder if rather than increasing your deductible by 500.00 causing a rate increase that will last the term of the loan, (you'll have to do the math as see EXACTLY how much this total amount would be over the time left on the note)...ask them if you could put up a 500 bond with them...or somehow give them (the leinholder) the 500 bucks (difference in the deductibles) to hold in reserve in case there is a claim....then at the end of the note say the final payment or something...they can either use that money to make your last payment or just give it back to you...That way the leinholder is protected, and you don't have to pay the additional premium...Of course this makes no sense if the increased premium (from 500-1k deductible) doesn't exceed 500 dollars...worth a shot...
Another thing...assuming that your loan is in excellent standing never late etc...I would appeal to their sense of fair play...ie 'it's been two years people'...now if your loan is not in good standing this could've trigger the review number one, and they more than likely will not go for it...
I would be willing to bet that there is something in the contract that will allow them to get the insurance they want you to have, and then charge you for it, and believe it me it's way more expensive than the increase you will see....not sure how they would work it, but I am sure they have an angle...
Do let us know the outcome...and remember....be VERY VERY nice to the loan officer when you talk to them...they do have the contract on their side... _________________ Have you been helped by a poster? Do you want to show your appreciation? YOU CAN !! Just simply click on the donate button and send them some coin!
That's a good point. Again- depending on the terms, they could easily have the right to alter the terms. Normally, the insurance "rules" are in the dealership paperwork, and you probably signed a number of forms. You should still have copies of this paperwork- it's important. Somewhere buried in there you should find the insurance information. Oh yeah- don't forget that you signed for it.
