The driver can choose a program that includes only a part of the insurance cases. When issuing a car loan, banks first of all insist that the borrower insure the car against theft and damage. This is often mandatory. If the borrower refuses to take out insurance, there is a high probability that the application will not be approved. And if he does not renew for the second and subsequent years, the lending conditions may change.
There are definite advantages:
financial protection in any accident. Even if you drive very carefully and cannot be the culprit of the accident, there is a chance to collide with a driver on the road who does not have OSAGO. This is illegal, but still possible. In this case, you will not receive any compensation or will spend a lot of time and effort on the trial. And with CASCO, your guangdong mobile number database insurance company will deal with compensation for damages;
a wide range of insurance cases. In case of theft and all types of damage, you can receive compensation.
You receive certain advantages when taking out a loan:
large selection of programs;
higher probability of loan application approval;
reduced interest rate.
Disadvantages of casco
If you decide to take a car loan with mandatory insurance, you will face two disadvantages:
the first is the high cost of the policy. This problem can be solved by including the insurance costs in the loan amount. But in such a situation, overpayments and monthly payments increase significantly;
The second is restrictions on the choice of car. Not all vehicles can be insured. Insurers look at the age, mileage of the car and its general condition. If you are planning to buy an inexpensive used car, you will not be able to do this under the car loan program.
There are also disadvantages that are not related to the specifics of lending, but to the insurance itself:
risk of bankruptcy of the insurance company. Since this is a non-governmental program, if the insurer goes bankrupt, you not only lose protection, but also lose the funds you have already spent on insurance;
long procedure for compensation of damage. Insurers are in no hurry to pay compensation and carefully check the details of each case. The proceedings can take many months;
risk of refusal to pay. The case may be considered uninsured if the driver handed over control to another person or was intoxicated.
Why does a bank need insurance?
When a bank issues a loan, it always runs the risk of non-repayment - for example, if the borrower encounters financial difficulties. Collateral (pledge and surety) reduces the bank's risks, and therefore increases the likelihood of approval of the application. In addition, secured loans always offer more favorable interest rates.
Thus, secured lending is beneficial to both the bank and the borrower. Most often, it is used in targeted loans - mortgages and car loans. In this case, apartments and cars not only become collateral, but are also insured. This provides an additional guarantee that the bank will be able to compensate for its costs if the borrower stops paying the debt.
An uninsured car is poor collateral, as it can be damaged by accidents, natural disasters, and third-party actions. In addition, the borrower may lose it as a result of theft. Therefore, an insurance contract is provided for as a full-fledged pledge. The borrower must pay for the policy himself, but at the same time he receives additional protection and more favorable lending terms.