Reader question:

A couple of days, I got arrested for drunk driving and now I have to file an SR 22 form. What is it? Thing is, I’m going to be getting a new car. Will I have trouble getting it financed because of my SR 22 insurance requirement?

Becca

You shouldn’t.

The SR 22 auto insurance form doesn’t do much at all to hurt you except that it makes your car insurance rates go up, except for in special circumstances when your car insurance company allows you forgiveness for your very first drunk driving offense. It is, essentially, a form that the company must file so that the state has proof that you are covered by an auto insurance policy. In most states, you are required to have an auto insurance policy anyway, but the SR 22 helps these states keep track of you in this special case so that if you cancel your auto insurance, the department of public safety is notified so that your license may be suspended.

A new car can easily be financed while you are using SR 22 auto insurance, because the only thing that the financer looks at is whether or not you have the right kind of coverage. All they want to know is that, if you get into a car accident and have to make a car insurance claim, they will still get their paycheck for the amount of the loan. I do think I should call into question how wise it would be to finance a new car while you have SR 22 auto insurance, just considering what the rates would be. Already, SR 22 auto insurance rates are much higher than usual, as are those for new car insurance. Putting the two together might be a hard hit on your budget.

Cheers,

Fashun Guadarrama.