There are no legal requirements preventing you from securing a title loan without car insurance. However, to lower their risk, your lender may require proof of insurance before approving you for a title loan.
At Montana Capital Car Title Loans, Insurance is not required for loans under $5,000. We aim to help individuals who need emergency money and don’t qualify for traditional bank loans. Here’s what you need to know.
In a Nutshell:
In order to get a title loan without car insurance, you will need to find a lender who doesn’t require it. Typically, the more money you need to borrow, the harder it will be to find a lender who will approve your title loan without car insurance.
This is because the larger the loan, the more risk there is for the lender. If your car was damaged in an accident or even totaled, car insurance would help with the repairs or replacing the vehicle. Without insurance, however, the lender is left with less or no collateral to secure the loan. That is why many lenders require insurance on title loans.
Find a Lender Who Doesn’t Require Car Insurance
In order to get a title loan without car insurance, you will need to find a lender who doesn’t require it. Typically, the more money you need to borrow, the harder it will be to find a lender who will approve your title loan without car insurance.
This is because the larger the loan, the more risk there is for the lender. If your car was damaged in an accident or even totaled, car insurance would help with the repairs or replacing the vehicle. Without insurance, however, the lender is left with less or no collateral to secure the loan. That is why many lenders require insurance on title loans.
Do I Need Car Insurance to Get a Title Loan with Montana Capital?
At Montana Capital Car Title Loans, we don’t require insurance on loan amounts under $5,000. However, if your loan is over $5,000, you will need to provide proof of full coverage insurance. This will provide the funding needed to make any repairs or replace your vehicle should your car be in an accident or stolen and ensure we don’t lose money on the loan.
We do recommend ALL borrowers purchase full coverage insurance, though. Accidents and theft DO happen, and paying for repairs on top of your title loan payments can be expensive. Thinking ahead and protecting your asset with insurance is a wise investment and will help keep your loan’s collateral safe.
Lenders Protect Their Investment
Two common types of insurance that title lenders often require are collision and comprehensive. These policies help protect the lender’s investment in your vehicle for the duration of the loan to ensure your collateral isn’t lost.
For example, let’s say a borrower defaults on their loan, but their vehicle was totaled in an accident. Without insurance coverage, the lender won’t have anything to repossess and sell to make up for what is owed on the loan.
How Title Loans Work
Short-term Loan with High Interest
A title loan is a short-term loan with high-interest rates that uses your car as collateral. Giving up your car’s title allows you to borrow from its equity. At Montana Capital Car Title Loans, borrowers can access up to 70% of their car’s value.
Qualifying for a Title Loan isn’t Complex!
An auto title loan focuses primarily on your ability to make your monthly payments and your vehicle’s value (aka the collateral). This puts less emphasis on things like your credit score or whether or not you have a car insurance policy. After all, if the borrower defaults on their loan, the lender can repossess the car.
Keep Driving Your Car
When you borrow a title loan, you give up the auto title but keep driving the car. As a result, you can drive the vehicle like normal, and when you repay the loan according to the loan agreement, you’ll receive your title back, lien-free.
Title Loans and Car Insurance
Your state may mandate specific types of insurance for you to legally drive your vehicle on the road. Liability insurance is a minimum required in almost every state. Policies like comprehensive and collision are often optional.
However, lenders can decide what insurance requirements, if any, they want to set. If your lender requires “full coverage” car insurance, that means they require you to carry both comprehensive and collision policies to cover any physical damage.
Check out your state’s car insurance requirements and liability vs. full coverage car insurance to learn more.
How Car Insurance Works
Car insurance can protect you in the event of damage or a total loss. Insurance coverage and policies vary but typically include a combination of regular payments (usually semi-annually) and a deductible (the money you pay before your insurance covers any costs).
Some examples where insurance would be beneficial include:
- Your vehicle is stolen
- A tree falls on your car
- Hail shatters and dents your car
- You’re t-boned in an intersection
Determining What Kind of Car Insurance to Get
To protect yourself financially, usually, the more insurance coverage you have, the better. In most states, liability insurance is required to drive your vehicle. This covers anyone or anything you may cause damage to if you are the cause of an accident.
Unlike liability car insurance, collision insurance isn’t required but is just as important. This is because liability insurance covers others, while collision covers your car. So, for example, if you were the reason for an accident and totaled your car, your collision coverage would pay the vehicle’s current value.
Other coverage options include:
- Comprehensive insurance – Collisions aren’t the only thing that can cause damage to your car. If an accident like a falling tree causes damage to your vehicle, comprehensive coverage can protect you from taking a loss.
- Medical payments – If an accident causes injuries to you or your passengers, medical payments cover the cost of doctor or hospital bills.
- Personal injury protection (PIP) – If you are injured while driving, walking, or biking, PIP may cover the medical costs you incur, regardless of who is at fault for the accident.
- Underinsured/uninsured motorist coverage – If someone else causes an accident but doesn’t carry enough or any insurance, your underinsured/uninsured coverage would cover the expense.
How to Apply for a Title Loan With Montana Capital
Applying with Montana Capital is easy, even if you don’t have insurance.
We offer two ways to complete the application, online or over the phone. Our online application takes only a few minutes to complete, and you’ll receive an answer regarding your pre-approval instantly.
If you need help completing the application, call us at 1-888-700-8900. Representatives can walk you through the process and answer any insurance-related questions you have.
We use the following information to decide if you’re pre-approved. You will need to provide:
- Personal info (name, age, location, etc.)
- Income and employment status
- Car details (make, model, year)
- The amount you wish to borrow
We use this information to decide if you’re pre-approved for the requested loan amount.
Qualifying Factors
While we do pull your credit at Montana Capital, your credit score is not the primary qualifying factor of approval. The most important criteria we consider is your ability to repay the loan and your vehicle’s market value. Our flexible eligibility criteria help borrowers get the financing they need, even if they have bad credit or no insurance.
To qualify for a car title loan, you must meet the following requirements:
- Be at least 18 years of age
- Have a lien-free title in your name
- Provide adequate proof of income
- Provide photos of your vehicle
- Have adequate equity in your vehicle
- Provide government-issued photo ID
How Much Can I Get for a Title Loan With Montana Capital
Montana Capital Car Title Loans can approve borrowers for up to 70% of their car’s value. Loan amounts vary from $500 to $50,000 and are determined by factors such as income and repayment ability.
For loan amounts under $5,000 at Montana Capital Car Title Loans, insurance is not required. However, if your loan exceeds $5,000, you must show proof of full coverage insurance.
FAQs
Can I Still Apply for a Title Loan With Montana Capital Even if I Don’t Have Insurance?
While carrying insurance coverage on your car is always a great idea (and usually the law), you can apply for a title loan with Montana Capital without insurance if you borrow less than $5,000.
Full coverage car insurance is required if you need a loan amount higher than $5,000. Remember, car insurance is required to drive a car in most states except Virginia and New Hampshire. Fortunately, there are many ways to get affordable car insurance. Speak with a representative if you need assistance.
What Is the Best Coverage for a Car Title Loan?
Coverage that protects you financially in any circumstances, including a collision, non-moving accident, and theft, is always best. After all, if your car is totaled in an accident, you must still repay the loan. The more comprehensive the coverage, the better.
However, you need to take into account the cost of insurance, what you can realistically afford, and what makes sense for the age, make, and model of your vehicle. Shop around for a policy that protects your vehicle from likely damage and meets your state’s requirements.
Why Do People Use an Insurance Broker?
If you don’t have insurance or are ready for a new policy, you may consider an insurance broker. Rather than working for a specific insurance company, they partner with many companies to help you find the best car insurance policies at the best car insurance prices. Some insurance brokers also help the insured file insurance claims.
Insurance & Title Loan- The Bottom Line
Car insurance is invaluable; it protects you, your car, other drivers on the road, and even your car title loan lender.
Before applying, it is best to check with your lender and state’s laws since regulations vary. If you don’t have insurance, Montana Capital may still approve you if your loan amount is under $5,000. Any more than that, and you will need to shop around for a provider.
Remember, since you’ll pay higher interest rates than traditional financing, it’s best to exhaust all options before deciding on a title loan, no matter how much.Not sure where to start? Apply today to see how much you can get, or talk to a representative at 1-888-700-8900.
Written by
Samantha Hawrylack
Samantha Hawrylack writes for our company and is an expert in personal finance. Sam received her Bachelors of Science in Finance and her Masters in Business Administration from West Chester University of Pennsylvania. She began her career in the financial services industry and shifted to an entrepreneurial role where she could directly impact clients. Sam has an impressive background in personal finance and business management.