Car loan without CASCO for a new car
Not everyone can afford a new car, so many people think about taking a loan from a bank. Today financial institutions offer their clients a variety of programs. Many banks require a hull insurance policy for a car loan and other ancillary services. The policy covers many risks; however, it is also an additional expense. Is it possible to get a car loan without hull insurance and in which banks is such an opportunity provided?
KASKO for a credit car – is it necessary to buy it?
For many people taking a loan from a bank is the only way to get a car. Here the question immediately arises – is it possible to refuse hull insurance for a car loan and thus save money? There is only one answer – it is possible. It is up to you whether to use this service or not – the decision is individual, and by law it cannot be imposed by the lending institution.
At the legislative level it is stipulated that you can get a car loan without KASKO. However, refusal of the policy will automatically lead to worsening conditions on the credit. In this case, the bank makes tougher demands, because its risks become higher. The financial institution has no guarantee that the person won’t spoil the car and then refuse to pay for it. Simply put, a car loan without CASCO on used cars or new cars is possible, but there are many nuances.
Pay attention. If you are using any additional services, the cost of the purchased car will often increase by 50%. In order to minimize financial losses, you can refuse a hull insurance policy for a car loan, and then buy an MTPL policy.
Car Loan without CASCO – pitfalls
If you ask a representative of the lending institution – whether KASKO for a car loan for a new vehicle (vehicle), the answer is likely to be positive. In this way the financial institutions insure themselves. However, as mentioned above, it is illegal, the client has the right to choose a package of additional services. At the same time the refusal of compulsory insurance may lead to:
- Refusal of the bank to lend to the client. In such a situation, the question – is it possible to get a car loan without KASKO for a new or used car, will disappear by itself. If the need in the car will be acute, then you will have to buy a policy.
- Increase of the interest rate for a car loan. Here, the financial institution can set the interest on the loan, which is often equivalent to the policy.
- Restricting the borrower’s choice of a car brand. As a rule, if you get a car loan without Hull Insurance for a new domestic or foreign car, it is difficult to buy an expensive car.
- Reducing the number of months for repayment of the loan. The situation is negative for the borrower. If the repayment period of the loan is reduced, the payments for each month will automatically increase.
Another pitfall when taking out a car loan without CASCO on a new car or a used one is that the credit limit on the car loan is reduced. Such a decision of a financial institution will force the client to choose only low-end car brands, which does not suit everyone.
Please note. If you get a car loan without KASKO for a new car, the bank has the right to require a lot of additional documents and guarantors.
Car Loan without Motor Hull Insurance for used cars – conditions
Some lenders approve a car loan without CASCO on used cars, but only on one condition – the period of operation of the vehicle no more than 5 years for foreign vehicles, and not more than 3 years for domestic brands. If these requirements are met, then the borrower can safely apply.
The loan for used cars, as a rule, must be repaid within five years, and for foreign up to ten years. To automobile loan without CASCO on used domestic or foreign cars was approved with a higher probability, it is better to provide a lending financial institution or to attract to the transaction guarantor.
How to take out a car loan without KASKO
Before giving your preference to a particular lender it is important to carefully read the terms of the contract, to find out whether you need CASCO for a car loan at a particular bank, and then to apply. It is possible to get a car loan without the CASCO and life insurance. You can apply for a car loan without hull insurance and life insurance on the following terms:
- Age for men from 22 to 65 liters, and for women up to 50-55 liters. Some banks allow citizens of 18 years of age or older to apply for a car loan;
- Residence in the region where the financial organization is located;
- The total length of service borrower shall not be less than 1 year;
- Income of not less than 15 thousand per month (each bank has its own requirements for income).
Of the documents lenders require a driver’s license and passport. Additionally you may need a military ticket, certificate of 2-NDFL, passport and other depending on the requirements of the lender.
How to get back car insurance
How do you get your hull insurance back on a car loan if, for example, the debt for the car is paid off early? Refund in such a case is possible, but only in a partial amount. You can get a full refund of the amount you paid for the policy if the loan was paid off early. Before repaying the KASKO insurance on a car loan, you will need to contact the bank and write an application for recalculation and refunding the money. If the lender refuses to pay, then the client has the right to appeal to the court, which in all cases satisfies the requirements of the borrower.
Important! Formed KASKO, but changed your mind? Contact the lender’s bank within five days with an official application for the return of funds spent on the policy. This period is stipulated by the law of the Russian Federation, so no financial institution has the right to refuse. The countdown period begins on the day the client and the lender entered into a formal agreement.
Which banks issue car loans without CASCO
For new cars without CASCO issue a loan such financial institutions as:
- Uralsib Bank – the annual rate will be 16.9%, and the offer is called “Tale without KASKO”. The lender does not require the purchase of the policy and does not worsen the terms of the loan.
- Europe Bank – possible registration under 13% per annum. The package of documents depends on the amount of credit and car brand.
- VTB – without the voluntary service KASKO rate is from 14.9% and above. The final amount depends on the loan amount and other conditions of the agreement.
- Auto loan without a policy of compulsory insurance for a used car provides VTB Bank. It provides an opportunity to take a loan for a car of a foreign manufacturer at an annual rate of 14.9%.
- In the organization East Express Bank is possible to take a car loan for a used vehicle at 19%.
To summarize, is a hull insurance for a credit car mandatory? No, it is not obligatory. No one can force you to buy the policy, and it is enshrined at the legislative level. One point is that without the above policy it will be difficult to obtain credit for a car and it will be possible in a limited number of organizations. If you have decided to buy an insurance policy, then you should learn about the process of payment on CASCO credit auto, the terms of damage compensation and many other nuances before signing the contract.
Is Hull Insurance policy necessary when buying a used car and is it possible to obtain a credit for such a car without hull insurance?
Casco insurance policy is a significant expense item when buying a car. And if a new car often wants to be additionally insured, not everyone is ready to spend on hull insurance for a used car. Let’s analyze in what situations buying a used car you can not do without hull insurance.
Casco for used cars: restrictions and risks
Casco policy for a used car without problems can be issued if its age does not exceed ten years for cars of foreign production and seven years – for vehicles of domestic production. Car owners usually have access to all-inclusive insurance policies, as well as “mini” versions, including, for example, theft and total loss of the car only.
The procedure for obtaining a used car policy is no different from buying a new car policy. The price is affected by the same factors as in the case of a new car:
- age and experience of the driver (for an inexperienced motorist, the policy will cost more);
- Excess (with a deductible the policy could be 15-20% cheaper);
- Availability of an anti-theft system (without it the price of the policy increases);
- The amount of the sum insured.
However, you may encounter various restrictions, which the insurers use to reduce their risks. After all, the older the car, the more it costs for repairs relative to the sum insured under the hull insurance.
“The hull insurance rate for a car with a longer life span is higher than for a new car. For example, for a new Kia Sportage with 2.5 million rubles and 10-20 thousand deductible, hull insurance will cost about 60-70 thousand (for 35 year old driver from Moscow with ten years of experience). For the same ten-year old car worth 1.2 million rubles, the price of hull insurance will be almost the same: 50-60 thousand. That is the rate for a car with a solid service life will be significantly higher (4.6% vs. 2.6% for a new one). The main reason is that, as a rule, the attitude to the car with high mileage is less careful and the risk of body damage is higher on average,” explains the managing director of auto insurance company “Renaissance Insurance” Sergey Demidov.
As a result, the cost of the policy can be quite high. Therefore, it is important to assess the feasibility of buying such insurance.
It is difficult, but not impossible, to insure a car that exceeds the threshold of old age. Most likely, the insurance company will offer an individual rate, taking into account the value of the car, the overall technical condition of the car (you will need to have it inspected), the driving experience of the new owner, the number of years without an accident and many other factors.
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“Now there are many offers on the market even for cars made in 2007, and for regular customers insurance companies may agree on a policy for an earlier year of manufacture. This is more of an exception, though. For cars manufactured in 2006 and older, even if they have excellent technical condition and low mileage, it is difficult to obtain a comprehensive insurance policy. It is also difficult to obtain comprehensive insurance for a vehicle with any problems with documents, construction changes, or severe damage to the body (hull insurance does not cover damaged elements until they are repaired)”, says Sergey Demidov.
Of course, if the car is bought without credit funds, the future owner personally decides on the necessity of insurance. But if you buy a car on credit, it may be a problem if you cannot conclude a hull insurance policy.
Casco when buying a used car on credit
Used cars are often purchased, including on credit. The purchased vehicle in this case becomes a pledge of the bank, a guarantee of return of money, that is, the lender is interested that the car has not lost its market value and is suitable for sale in case of non-payment of debt. That is why Kasko is most often an obligatory part of the credit agreement.
This is where the main contradiction occurs. On the one hand, hull insurance is a voluntary insurance, that is why the term “obligatory” does not exist. On the other hand, there is a great probability that the bank will refuse to give a credit without hull insurance policy. In opposite situation the bank can even decrease the interest rate for the credit.
There are proposals for car loans without hull insurance, but it should be taken into account that conditions are adjusted due to “appreciation” of other parameters:
- Increased interest rate;
- Additional collateral, for example, other property;
- The need to provide additional financial guarantees;
- Reduced term of credit extension;
- Reduced loan amount;
- Necessity of down payment (from 30-50% of the car price);
- Guarantor for the loan;
- restrictions on the make and model of the car.
It is worth mentioning that all changes to the credit agreement should be discussed before signing it: if the client starts discussing the hull insurance refusal after the signing, the bank can charge an additional fine for refusal or for the changes to the agreement.
What to do if hull insurance is impossible to be arranged or the policy is unreasonably expensive
If the bank doesn’t issue a credit without Casco, and the buyer needs a specific vehicle, but it is impossible or too expensive to insure it, you can try to get a normal consumer credit. In this case you won’t have to pay the Casco. But you will most likely need to insure your life and health or provide the bank with additional collateral. And the rates on consumer loans are usually higher than on car loans.
“It’s important to remember that unlike with a consumer loan, the original PTS is transferred to the bank for safekeeping. It is a standard practice when the bank accepts the original vehicle license plate for safekeeping in order to protect itself from the loss of the collateral. When the borrower sends the document for safekeeping, the bank is responsible for the safety of the vehicle. But in fact and legally the car belongs to the borrower,” reminds Yulia Korneeva, the insurance product manager of Banki.ru.
Assertion that you can get a credit hull insurance for the first year, and a year later it was not prolonged, wrong. The bank will quickly discover the “ruse” and may impose a penalty, raise the interest rate on the loan or request to pay as soon as possible for another year of hull insurance.
The only official way to save money on your hull insurance is to prepay the credit. This way you will save a great deal on both the interest rate and the cost of the hull insurance. If you no longer need the hull insurance policy, the client can cancel the agreement at any time and get back the money for the unused insurance period.