Can a car dealership take my car for not keeping my insurance current?

I am timely with my car note; it is not leased. The dealership has called and threatened to take my car for not maintaining the insurance. Can they do this?

Asked on December 4, 2010 under General Practice, Alabama


James Johnson

Answered 9 years ago | Contributor

Yes, the dealership or finance company (whoever it is financed with) can repo the car if your loan documents require you to keep the car insured.  

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Is the dealership holding the car loan?  As for whether or not they can just "take" the car from you that remains to be seen.  But if obtaining insurance was part of the contract for sale (and listen, it is a part of the agreement whether or not it is stated in the contract.  It is implied that is you are buying a car and the state requires insurance as most do that the car be insured) then they can institute an action for breach.  Maybe the contract does state that they can reposes it for lack of insurance.  Read it.  But if they are listed on the title they are not going to take the chance that you are not insured.  So get the insurance or sell the car. 

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