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In the Auto Dealers Declarations form, under Item Six, there is a category listed as “Interests Covered—All Interests in Any Auto Not Owned by You or any Creditor while in Your Possession On Consignment for Sale.” Could this coverage apply if our insured repossessed a vehicle and had the vehicle on its lot?

Ohio Subscriber

It depends on who owns the car. If the insured owns it or the creditor owns it, there is no coverage under this category. What that portion of Item Six applies to is if, for example, I own the car outright and give it to the insured on consignment for sale. The insured and I would have an interest in the car. If a creditor that owned the car gave it to the insured on consignment, that section of the form is not applicable.

So, the answer to the question depends on who owns the repossessed vehicle. Presumably, when a car is repossessed, the person that bought the car has not made the payments and the creditor is taking back the car. The creditor (perhaps the insured; you did not specify) holds the actual title until the car is paid for, but the buyer is held responsible for the ownership of the car. So, you might want to check with an attorney who is familiar with the law in your area on this point.

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