ok guys here is the situation. I bought my Lexus SC300 used about 2.5 years ago. I went through a small dealer and my loan was assigned to Wachovia Dealer Services. I had full converage insurance for a while and just last year, I opted to get only liability.

I figured since my dad's friends do autobody, I could get a hook up if anything happened. So far so good. I went for almost a year on liability insurance only. Today I get a statement from Wachovia Dealer services stating that my balance is $5900 (it was $2800 last month).

The economy was tight and my wages were reduced so I thought I could save. Anyone have any idea who I can get out of the backcharges? It is a shock to see my balance double and my payment more than triple. it was about $150. Now its around $490.

HELP!

 

Welcome to CL.
First, if the car is financed, you must carry insurance to cover any losses the bank may suffer. That means comprehensive and collision coverage. Liability only covers you, as a driver, and minor property damage that you cause to *other people's property*. If the bank finds out that they're at risk (looks like they have) they have every right to protect themselves from loss. Since you are responsible for carrying insurance, they will bill you for the premiums. It's a bad deal, though, because the premiums only cover the balance of the loan and are hugely expensive.
Second, What I would do, is, go out and buy the coverage yourself and then show proof of that coverage to the bank. I don't see why they wouldn't remove the coverage leveraged on your loan. They should have notified you of the pending charge long before they actually charged you. You can't blame this on the bank.

 

I'm with IS350jet--Wachovia doesn't care about shopping around for the best price for premiums--they care about protecting their collateral ASAP. They aren't trying to save you money, since you did not comply with your loan agreement. Obviously, you will find your own insurance much cheaper.

 

Welcome to CL.

Give GEICO insurance a call (1-800-841-3000) and see if they will cover you (though they are sometimes picky about who they will cover). I have been with them for 28 years, and have been very pleaseed with their low policy rates and round-the-clock service, 24/7. A lot of companies promise low rates......GEICO usually delivers, IF they are willing to take you on.

Then, if GEICO (or another company) takes you on, you can go back to the bank's loan officer, show proof of coverage....and maybe get your car payments back down again.

 

It's called forceplacing coverage and it specifically designed to cover the banks assets from people like you who try to get over. There is nothing you can do to get out of the charges since no insurance company will give you a new policy backdated to the time of the sale. The coverage can't be cancelled as the bank wants protection from any possible unrevealed problems that may have occurred during the period you allowed the coverage to lapse.

When you provide the bank with proof of current ownership, they can (depending on the terms of your sale agreement, they may be able to keep charging you at the current rate since they now view you as untrustworthy and feel a need to ensure their asset is protected) drop the forceplaced coverage to reduce your monthly payment.

 

Welcome to CL.

"Today I get a statement from Wachovia Dealer services stating that my balance is $5900 (it was $2800 last month). "

The issue is with Wachovia Dealer services and they should have contacted you a long time ago about proof of insurance, did they?

 

If the owner is financing the car than I agree that he should have had full coverage and its tough luck for him for breaking the law. It's an SC300 though so I wonder if he really did finance the car and still has a balance. I mean, the last SC300 was a 2000 model right?

 

damn 5900 is a huge hit