If you have taken out a car loan with insurance, you are entitled to obtain reimbursement in the event of early repayment of the loan
To pay off a car loan with insurance , you have the option of having the part of the insurance premium not yet used reimbursed. If, on the other hand, you decide to keep the insurance active, you can do so, but we advise you to carefully evaluate all the possibilities that the law offers you in case you have requested a car loan with insurance included.
ATTENTION TO CAR FINANCING WITH COMPULSORY INSURANCE
Applying for a car loan can be a good solution when you want to carry out a project that is close to your heart and do not have the necessary liquidity to carry it out. Once you have made this decision, you usually contact a bank or a financial institution to apply for a loan. However, you often hear the answer that to obtain certain favorable conditions you must also take out a life policy or a PPI (Payment Protection Insurance) policy. Too bad that by law there must be no forced link between the two products (car financing and insurance). The intermediary cannot make the activation of a car loan subject to the further stipulation of a policy sold by the same operator granting the loan. According to the law, if an offer for a policy is made and you are asked for insurance to obtain the loan, the financial company must give you two other different estimates. We also underline that requesting the reimbursement of this policy after the stipulation is not easy.
TERMINATION OF THE INSURANCE LINKED TO THE CAR FINANCING
The early repayment of the car loan is a type of procedure that involves several fundamental steps to know. In particular, it is important to analyze the different methods and how it is possible to carry out an early repayment and everything you need to know about it. An early repayment of an auto loan with insurance occurs when a person has their own liquidity and therefore the possibility of paying off all the remaining debt in advance. However, in this regard it must be said that Banking Institutions do not always return all expenses to the consumer. Very often this also happens due to the lack of attention on the part of the applicant regarding all the procedures and rights in the event of early termination. We therefore see that it is always possible to obtain a refund following the closure of a car loan with insurance.
THE REIMBURSEMENT OF THE CAR LOAN WITH INSURANCE IS A RIGHT
In fact, if we decide to pay off a car loan with insurance before the expiration date, we are entitled to obtain a refund of the unused premium, with correct calculation criteria. It is regulated by IVASS ( Institute for the Supervision of Insurance ) through art. 39 of regulation no. 41/2018 on the subject of single premium insurance contracts connected to loans. The Institute specifies that it is the consumer's right to know how to return the single premium paid for the residual period with respect to the original deadline. We also specify that the above applies both in the event of early repayment and in the case of transfer of the loan. The insurance company can only withhold administrative costs actually incurred provided that they are also indicated in the contractual documentation. We therefore recommend that you always and carefully read the pre-contractual information set before signing a car loan with insurance and explicitly ask the intermediary to highlight all the clauses relating to early repayment.
EmoticonEmoticon