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Do You Need Full Coverage on a Used Financed Car?

Tiny car with insurance documents

When you finance your next vehicle at Chevrolet GMC Of Fairbanks, we make the process quick and easy. Our finance department knows the ins and outs of vehicle financing, so we can help you from search to signature. We often hear the question, “Do you need full coverage on a used financed car?” Because many North Pole and Fort Wainwright car shoppers have this same inquiry, we have the detailed answer below. In short, the answer is, practically speaking, yes. Find out more by reading on or contacting us anytime!

Financing a Used Car: the Facts

When you buy a used vehicle, you very likely won’t be required to hold full coverage by law. However, as a requirement to be approved for financing, most lenders will require you to hold full coverage as a means of recouping their financial investment in the vehicle if you were to total the vehicle and default on your loan. This is the reason that when financing a car, regardless of its condition, you’ll generally have to get full coverage. 

In most cases, full coverage insurance is contingent on the full term of the finance period. In other words, if you have 36 monthly payments to pay off the vehicle, you’ll have to hold coverage for that amount of time, no more or no less. 

How Many Years Can You Finance a Used Car? 

When you finance a vehicle, you can generally finance it for between 24 and 96 months, but the term you’re offered will often depend heavily on your creditworthiness. When you do apply for financing, you’ll generally need to have the following at the ready:

  • 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)

Once you’re matched with lenders and loans, our finance team can help explain all of the terms to you, including any requirements about full coverage. Factors such as your credit and what you’re able to put down will have an impact on your loan details. 

Finance Your Next Used Car with Chevrolet GMC Of Fairbanks Today!

We make auto financing a snap. Give us a call at (907) 452-8211 for details, then apply for financing online. You can even check out our used vehicle specials to save more on your next used car purchase in Fairbanks.

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