When a vehicle is financed in someone else’s name such as your parents, it can be difficult to place that car on your own car insurance policy.

The problem you run into is that the finance company wants evidence of car insurance in the name of the person responsible for the loan and not in your name, even if you are in possession of the car.

You will need to contact the lienholder and find out if they will allow you to carry the insurance with you as the named insured instead of the person who financed the car.

If the lienholder allows you to be the named insured, you would still have to get over another hurdle with your car insurance company by finding out if they will allow you to insure a car you don’t own.

Most insurers require that you own a car to place it on your policy and insure it. This is called having an insurable interest in the vehicle.

Some auto insurers allow you to take a policy out on a car you do not own. If your car insurance company allows this, you would still have to list the person who financed the car as the owner on the policy.

If neither the finance company nor your own insurance company will allow the plan of letting you place the car on your auto insurance policy, then you may need to see about having you added to the car owner’s policy since you have possession of it and are driving it.

The car owner could see about listing you as the primary driver, and if he or she isn’t driving, he or she may even see about excluding himself or herself from the policy, which may help lower the car insurance rates.

For this arraignment to work, the car insurance company would have to agree to it, and you would need to inform them that the car was in your possession at your address.

If the car were not financed and the car owner could place the car in your name, it would make it much easier to insure the vehicle.

It may be that if you can’t get the financing company to agree to let you insure the car, or you can’t get an insurance company to insure it since you don’t own it, you may need to see about refinancing the car in your name.

 — Michelle Megna contributed to this story.

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Contributing Writer

Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions. When not writing, you can find her reading a book or watching anime.