Can the bank repo your car for not having insurance? (2026)

Can your car get repossessed for no insurance? Yes, drivers may face a car repo for no insurance on their financed car. While avoiding collision or comprehensive insurance to save money may be tempting, most lenders require full coverage auto insurance.

So, if you’re wondering, “Can I finance a car without insurance?” the answer is no.

Keep reading to learn more about the dangers of carrying no insurance on a car with loan balances outstanding. Find cheap full coverage insurance from the top providers by entering your ZIP code into our free quote comparison tool above.

Your Lender Could Repossess Your Car Without Full Coverage

When you get a loan to buy a car, the loan provider has a financial interest in your vehicle.

So, can they repo your car for no insurance? Yes, it will require you to keep full coverage on the vehicle to protect its interest. They can also take action through repossession if you don’t retain insurance on your car, truck, or SUV.

So, can your car get repoed if you don’t have insurance, or will they just put insurance on it? While it can repo your vehicle if you are driving uninsured, it is more likely to put force-placed insurance on your account and charge you the premium on your monthly payments. Force-placed insurance means your financer will buy the required amount of insurance and increase the payments on your monthly rates.

Force-placed insurance is expensive, and it only protects the lender’s property, the vehicle, and not you.

What Coverages You Need to Avoid Car Repossession

So, can my car be repossessed if I don’t have insurance? What types of auto insurance coverages will a lender require?

Financed cars have to be insured. Until you pay off the loan, your vehicle will be owned by the financier. Your financier may even tell you the minimum insurance coverage for your car. 

A financer will require full coverage car insurance that includes collision insurance, comprehensive insurance, and liability insurance.

Of course, most states already require liability insurance, which pays for damages you cause to others.

Full coverage auto insurance on a financed car costs vary widely, but a good average figure is $119 per month. The actual cost will depend on your claim history, your driving records, your credit rating, etc. Check out the table to see how much you could pay for full coverage from the top providers:

Kemper Auto Insurance Monthly Rates by Provider & Coverage Level

Some lenders also require gap insurance. This will cover the difference between your outstanding loan amount and the actual cash value of your car in case the vehicle is totaled.

However, you may wonder, “Can a bank repo your car for no insurance?” Yes, your car can get repossessed if you don’t have full coverage. So, if you’re thinking about buying a car, it would be wise to compare insurance quotes before you decide, because you can’t have a financed vehicle without insurance.

My Car Was Repossessed for No Insurance: How to Get it Back

Now that you know the answer to, “Can my car be repossessed for no insurance?” you may wonder how to get your car back if it gets repoed for no insurance. Follow the steps below:

1. Contact your lender to discuss the issue and understand the requirements to get your car back.
2. Pay off any repossession costs and ensure loan payments are up to date.
3. Secure insurance coverage for your car and provide proof to your lender.

Keep reading to learn the answer to the question, “Can the bank repo my car for no insurance if I can’t afford it?”

Avoid an Insurance Lapse on a Financed Car: Ways to Save on Coverage

Can my car get repossessed for not having insurance if I can’t afford it? If you can’t afford insurance, it will be up to your lender to decide if it wants to repo your car or would like to renegotiate the terms of your loan and work out a solution in which you can pay the insurance premium out of the reduced monthly payment amount.

Here are some tips to lower your auto insurance costs:

• Opt for comparison shopping. You can get quotes from multiple companies to get the best rates. 
• Refinance your car for a longer period to reduce your monthly installment amount. 
• Cut down on unnecessary costs to save for insurance premiums.
• Ask the insurer for discounts you may be eligible for.
• Credit score has an impact on your insurance rates. Take steps to work to improve it. 

If you’re wondering, “Can car get repossessed with no insurance?” there are government assistance programs for low-income drivers looking for affordable insurance. If you still can’t afford insurance, you may have to sell your vehicle.

Read More: What to Do if You Can’t Pay Your Auto Insurance

More About Car Repossession for Having No Insurance

Can a car get repossessed for no insurance? You can have your vehicle repossessed for not having car insurance. Auto insurance is part of your loan agreement. In addition, driving without liability insurance is illegal in most states.

It is a breach of contract if your car is financed by a bank and you don’t carry collision and comprehensive coverage. Failing to maintain insurance on a financed car may force the lender to add force-placed insurance on your vehicle if it decides not to repo it. Force-placed insurance will increase your monthly payments.

To avoid a repo on your financed car with no insurance, enter your ZIP code into our free quote tool below to find affordable full coverage rates from the best auto insurance companies near you.