Do you need insurance to get a title loan?

Quick Answer No, you don't need vehicle insurance to get a title loan. Some lenders may ask for proof of insurance to make sure their investment (your vehicle) is protected in the case of an accident or damage. However, there are some lenders that do not require insurance to get a title loan.

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Jack Woerner Answer updated on Jun 26, 2023

Fact checked by Dwayne Dumesle

No, you don't need car insurance to get approved for a title loan. However, it is very common for a lender to require it. Here is why.

Car insurance may give some lenders peace of mind about the loan in case of an accident or damage to your vehicle. In their mind, insurance on the vehicle prevents risk, and many lenders will try to minimize risk wherever they can.

Learn: Where can I get a title loan?

Lenders that do offer title loans without proof of insurance may have different characteristics compared to traditional title loan lenders:

  • Title loans already have high interest rates. Title loans without insurance may charge even higher rates.
  • If you do not pay back the title loan, the lender can repossess your car. This action could be expedited with a title loan lender who didn't ask for proof of insurance.

Another point to consider is that if your uninsured car is damaged or stolen with a title loan, you might have to cover the repairs costs and your title loan payment. I mean, you might as well just file bankruptcy right then and there, sheesh.

Learn: Can you file bankruptcy on a title loan?

But hold on a tick — having auto insurance is just the smart thing to do! You should have auto insurance to guard yourself against risk. Besides, almost all states require some level of auto insurance coverage.[1]

The loan process will be much simpler if you do have insurance but if you just can't get insurance, do not worry, you can still get a title loan if you shop around for a lender that offers them without insurance.

  1. Automobile Financial Responsibility Laws By State ↩︎

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