Car Insurance Question

by Neal W
(Ottawa, ON, Canada)

I was wondering if you could offer your thoughts about the following situation. it doesn't sound right to me, but perhaps I am wrong.

My 19 year old stepson wants to buy a car but can't afford to pay for one now. He has found someone who has a 2005 Accura that he will sell to him " over time". The arrangement they have devised is for my stepson to take possession of the car now and then make $500 payments each month - like until September of this year at which time the seller will transfer the ownership over to him.
During this time period the seller is saying that the insurance won't be a concern, because he has second driver coverage on his policy.
I am worried about placing the trust for insurance on a strangers shoulders and wonder what guarantees are there that he wouldn't cancel his policy or if in fact my stepson would be covered under such an arrangement. It would seem to me, that he will be using the car on a regular basis and should be the primary driver on the policy, not a secondary. My gut tells me that he should purchase his own insurance, but when he doesn't own the car - he can't .
This entire "scheme" sounds dangerous to me and I even wonder if I could be held liable in the event that my stepson is involved in a personal injury type collision. He seems hellbent on carrying through with this car acquisition and I would appreciate some advice for myself and to pass on to him in a timely fashion - before he acquires that car.
Thank you very much for offering this service.
Neal

Stepson Buying Car


Hi Neal
Sorry for the delay ... hopefully you talked your stepson out of this, or it happened to work out.

Until the ownership is transferred your stepson truly doesn't own it. So I would hope a written agreement was made. My fear is the seller would disappear at some point and take the car, leaving your stepson without a car and lighter in the pocket.

Also, your stepson should be listed as the primary driver on the car and should have proof of that. And he should have it in writing that the insurance will stay in force and that he will remain as the primary driver.

There might be other considerations that haven't occured to me. But the biggest comment I have is to stay away from situations like this.

Please be sure to discuss this further with a licensed insurance representative. Oh, and by the way, are your rates too high? Check here:

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Note: Always speak with a licensed insurance professional about your specific situation. This insurance information is general in nature and the policy wordings always take precedence. It is possible that there are errors and omissions in this website and www.canada-insurance-source.com, or its authors, take no responsibility.

Keep in mind that insurance licensing, legislation, and policies often vary by province and most certainly by country. Canada Insurance Source is a free information source. So use this site to gain a general understanding of insurance with your own area and situation in mind.  Make sure you review the "please read" page. Always speak with a licensed insurance professional about your specific situation.

Always speak with a licensed insurance representative about your specific situation.

This site is general in nature and there may be errors or ommissions

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