Can I get a pink slip loan without car insurance?

You cannot get a pink slip loan without car insurance. Driving while uninsured is illegal in 48 states. Compare quotes online to save up to 20%.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 14, 2020

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Here's what you need to know...

  • Pink slip loans are obtained by drivers who have a bad credit score and can help them improve their credit scores
  • Auto insurance coverage must be in place before applying for a pink slip loan

A pink slip loan allows a person who has clear title to his or her vehicle to borrow money against it. The lender advances funds, and the vehicle owner continues to drive the vehicle until the loan is paid off. The owner is required to turn over the title to the vehicle, along with an extra set of keys, to the lender.

Read on to learn all of the details for attempting to get a pink slip loan without car insurance and then be sure to enter your zip into our quote tool to compare free car insurance rates!

Pink Slip Loan and Credit

Lenders will provide drivers with less-than-perfect credit with a pink slip loan. The interest rate charged on the funds borrowed will vary from borrower to borrower, depending on the results of a credit check.

For people who need to get some cash right away, taking out a pink slip loan has the added benefit of helping them improve their credit score.

Every time a payment is made as agreed, this information is forwarded to the credit bureaus. Over time, the vehicle owner may be able to qualify for more conventional forms of financing.

If you are considering a pink slip loan, be sure to understand what debt can and cannot do for you and how to take the steps to get out of debt.

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Pink Slip Loan and Car Insurance

With this type of financing, the vehicle owner must have insurance in place before the funds can be advanced. If the vehicle is damaged in an accident, the value of the collateral is reduced.

The lender wants to protect its interests by making sure that it can recoup the value of the loan if the borrower defaults on the payments.

The vehicle owner will be required to have collision coverage on the vehicle. This type of insurance pays to repair the car if it is involved in an accident with another car or an object, such as a sign post, guard rail, or a fence.

If the vehicle is totaled, the collision coverage pays out an amount to the cash value of the car.

Another type of car insurance coverage that is a good idea in a situation where the owner is taking out a pink slip loan is comprehensive insurance. It pays out if the vehicle is stolen or damaged by fire.

Other types of perils included in comprehensive coverage are damage to a vehicle caused by rocks, hail, or a collision with an animal.

Compare Car Insurance Rates

Since you legally need to have insurance coverage, it makes sense to shop around to get the best possible price for your coverage. If price is an important consideration when you are looking for coverage, you may want to consider only getting the minimum level of coverage required for your state.

Not all states require a driver to have collision insurance in place, but most of them have passed laws making it mandatory to put liability insurance on a vehicle.

Collision and comprehensive coverage can be added on to the liability coverage you are required to have in place. When you are comparing rates for your car insurance coverage, be sure to ask about discounts that may be available to you.

The following are a few discounts most companies provide:

  • Multi-policy – better pricing to customers who insure more than one vehicle with the same company
  • Clean driving record – people who do not have a record of tickets or accidents
  • Safety devices – airbags, anti-lock brakes, anti-theft system
  • Good student – drivers who maintain an A or B average in school
  • Loyalty discount – having the same insurance company for several years

If you are considering getting a pink slip loan, make sure you have the right type of insurance coverage in place.

Some lenders will allow a car owner to apply for the loan electronically, which means that funds can be advanced very quickly.

A pink slip loan can help a car owner access cash to cover an unexpected expense or for any other purpose. If you want to be able to use the equity in your vehicle to get cash when you need it, the time to get the proper insurance coverage in place is right now.

The insurance tool on this page can provide you with information about choices available to you. Just enter your ZIP code and get instant insurance quotes!



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