Do You Need Full Coverage on a Used Financed Car?


We here at Ideal Auto know how important it is to provide transparency when it comes to auto financing. Our team of experts is able to help you answer any questions you have about the process including whether or not you need full coverage on a used finance car. 

While it’s no secret that often, used cars don’t require full coverage, when you finance them, that’s not usually the case. In fact, although by law, there may not be a stipulation stating you need to get full coverage with a financed car, the overwhelming majority of lenders do in fact require full coverage as a means of protecting their financial interest. Learn more below with Ideal Auto, or contact us anytime!

Financing a Used Car: What You Should Know

Most states do not require you to get full coverage, by law regardless of whether the vehicle you’ve bought is new or used. That said, lending institutions that hold your car loan will pretty much always want you to have full coverage regardless of whether your car is gently used or new.

Generally, the way auto financing works is that you continue to make payments until you’ve paid off your loan and receive a free & clear title and/or lien release. This means if you apply for financing and get a loan for say 36 months, your lender will usually hold onto your title for that period of time.

In most cases, full coverage insurance must be held for the full term of the finance period. In the example we’ve provided above, that would mean you’d need to maintain full coverage on your used financed car for a total of 36 months.

How Many Years Can You Finance a Used Car? 

How long can you finance a used car? Generally, that depends on your creditworthiness as well as the lender you’re working with. Here are some things you’ll need to obtain a loan:

  • Valid Driver’s License
  • Valid Car Insurance Card
  • Any supporting financial documentation (i.e. last two pay stubs)
  • Any existing vehicle documentation for your current vehicle (if applicable)

After you’ve been offered a loan from a lender, our finance team can help explain the associated loan offer(s) and loan terms. 

Wondering what exactly has an impact on how many years you can finance a used car? Some of the main factors include:

  • Your credit 
  • What you’re able to put down 

Financing a Used Car with Ideal Auto

It’s our aim to make the ins and outs of auto financing clear to you. We here at Ideal Auto can’t wait to help you with your financing questions and provide you with plenty of car buying tips to keep you informed about all things related to the world of car loans and leases!

Ideal Auto 48.20342, -101.3122393.