Notice of Default on Car loan?

Question

Ok. Im really confused with my car loan I have. My car insurance was cancelled and they said I have to pay 1800.00 on my premium. I got nervous about my actual car loan I had out on that car. So I called my finance company up and asked them about what would happen to my car. They explained to me that nothing would happen to my car. But they would have to put insurance on my car which was going to be very expensive until I could get full coverage back Now I have recieved a letter of default from the company???? My payments are up to date i am only late 3 days by 170.00 my reg payment is 364.00 so I dont understand why I am at defualt

Answer 1

Because the second they add the insurance on to your car, any payments you make ALSO include the insurance - which is likely $500 to $600 per month MORE than just the car payment. So if your regular payment is $364, your forced placement (including insurance) monthly payment is likely $800 or more, which means that payment you sent in for the regular amount, isn't enough. The FIRST $500 (or whatever the insurance costs) that you pay, goes to the insurance. NOTHING goes to the actual car payment, until you've sent enough to pay the insurance FIRST.

They can repo your car, for not paying for the insurance.

Answer 2

1

Answer 3

You're in default for 2 reasons:

1. Your payment is late. One day late = in default.
2. You have failed to maintain insurance coverage on the vehicle.

Answer 4

the only reason i can think of is that maybe it stated as part of your financial contract u had 2 have full insurance on the car while u r still paying it off otherwise they could list it as a default.
some finance companies require it as part of the contract, that the car has 2 b fully insured.
i know mine does.

Answer 5

Lets see: you are 3 days late paying $170.

You ARE IN DEFAULT.

If you weren't, you wouldn't be behind in your payments.