If you do not pay for your vehicle in full and get the title, the person/car dealership is still the owner of the vehicle. As a result, this owner is referred to as a 'lienholder.' The lienholder has rights. They have the right to make you list them on your insurance policy as 'lienholder.' And, they have the right to make you purchase collision and comprehensive coverages. If the vehicle is considered a 'total loss' resulting from an accident, these coverages will protect the vehicle up to its actual cash value (which takes the vehicle's depreciation into consideration). The payment of the vehicle's actual cash value goes to the lienholder. The only way to avoid this is to pay for the vehicle in full and to get the title. Also, it is common for dealerships to help its clients with the registration process. And, it sounds like the dealership is trying to help you with this.

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