i live in california and a month ago our lender calls us and says that back in 2006 it shows we didnt have insurance on our car for a few months and it added 7000 dollars to the loan. then they say we need to pay 900 a month instead of our normal 450. if we fail to make the 0 payment they will repo our car. can i be charged that for something that happened 3 years ago? when i asked why did they wait until now to come after me for that they said it was because they switched companies who handled that for them and just noticed it. can they legally do that?
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Of course they can. When you sign a car loan agreement you promise to keep the car insured so that the loan company don’t lose out in accidents etc.Pay up or give the car back.
Wow, what a mess. They obviously think they can, now you need to have an attorney read your contract to see if they’re right. No one on here can tell you, it all comes down to what you signed. You need to take it to an attorney asap. I’ve never heard of that low life bullshit, but nothing surprises me anymore. If you didn’t have insurance on it they would have been notified within 30 days the policy was lapsed, and there is normally a time frame they can react to that within.
Adding insurance for a "few months" in no way, no how could add $7000. Do you remember them ever notifying you that they bought insurance on your behalf? The fact that they are just notifying you now and for a lame reason at that, makes me very suspicious. I would have a lawyer look at this and have him write them a letter. You could also contact your consumer protection office and the California banking commission. You may also want to write to your local state legislator and ask him to look into this. Something smells!
Yes, they can. In the original papers you signed you agreed that you would keep a certain level of coverage continuously on the vehicle, name them as loss payee, and allow them to add their own very expensive insurance if you failed to do so.
If you actually had insurance during that time period, show them you did. If you allowed it to lapse in 2006, you owe them an additional $7,000, and if is not paid, they have every right to repossess your vehicle.
They explained why it took them 3 years and are now asking for it.
Refer it and all copies of documentation to your state attorney generel’s office.Alsoo ask the BBB to look into it.
1st off pay the $900 per month so car will not be repo.
2nd; get all of your insurance papers together of all coverage you had; you may have to call each company you had insurance on and request proof of dates of coverage.
3rd; contact a lawyer, bring insurance papers, contract with lender and letters recd to date.
If as you say you were uninsured a few months only, then the $7,000 maybe way out of line. Granted when the lien-holder puts insurance on a car, it maybe more pricey then buying yourself, or they charge more like auto insurance companies when your auto policy lapses.
but either you may have been uninsured more than a few months so the huge price or their contract is iron clad and nothing at this point will change it and you will be on the hook, but a lawyer can review and determine if you do in fact owe on all of the above charges, even though they just caught 3 years later. but say the lawyer can find that you indeed only had a few months lapse, he might be able to argue you only owe say $3,000 vs $7,000.
Either way, pay the amount now till a lawyer can determine if on the mark or not, since if you fail to pay, they repo and guess what, when they repo, they will charge you repo fees, storage fees and they will sell at auction. When they sell at auction, they usually get around 1/2 of what your car is worth and then guess what you owe the balance of the car that they could not sell for.
Get the picture;;;;;;;instead of $7,000, could owe maybe another $5000 more for a car you now do not have and could be paying off the next 10 years.
good luck