Q&A: Can a collection letter be proof of ownership for a car that is paid off?

Question by display name: Can a collection letter be proof of ownership for a car that is paid off?
I know I still don’t legally own the car. I paid the balance of the car but the late fees are in collections now.

My dad put two motorcycles under my insurance but I recently got a letter my insurance would be canceled due to his driving record. Now he’s taking the motorcycles off of my account and I now have to provide “proof of ownership” to the insurance company to show that my car is in my name alone.

The only paperwork I have is this collection notice from an outside collection company. Will this suffice, or would it cause more problems with the insurance company? Thanks so much for any helpful knowledgeable advice.

Best answer:

Answer by Elnish Arundel
It sounds like you didn’t get a paper called a “Lien release” when you paid off the balance. That os a document the finance company sends when you’ve paid off the car. If you DID, then FIND IT ASAP. That would be proof enough.
If you didn’t, then you can TRY it, but I make no guarantees. I’d say it’s a 55% chance, a little more likely than not, but it depends on the company.
As for it causing “more problems” it might in one regard: insurance companies, in the past few years, have begun checking credit reports when providing insurance. The collection issue could cause an increase in your premium; I know Progressive, for one, checks these FICA scores.

My opinion: TRY IT. The worst thing that could happen — them revoking your insurance — might happen anyway if you don’t, so what have you got to lose?

And, when you do, let us know how it goes. You’re probably not the only person with this type of problem/situation.
Hope this helps.

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One thought on “Q&A: Can a collection letter be proof of ownership for a car that is paid off?”

  1. “Technically” you do not own the car, since even though the car is paid off, you still owe late fees on it. And most likely till then, they will not send you anything that shows you paid off the car, since “technically” the loan company still owns the car and most likely will have to be shown as a lien on your auto policy, plus you will still have to have full coverage till they send you the title.

    You can try contacting them to see if you can work something out, but with this in collection, many companies “ding” you by making you pay more in premium due to bad credit.

    good luck

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