So i made a similar thread a few months ago, i got into an accident in november and my car has been in the body shop since mid december. Im still making payments for it and has been doing so. I just heard from my insurance company today that they ruled the car a total lost. Since i am still making payments for the car the insurance company will not reimburse me back with anything. My question is what happens now with my auto loan from my bank, will the loan continue until i pay the car off even though the car is no longer in my hands? Or will the loan get terminated and if so is there a fine for it? I am gonna go talk to my bank tomorrow about all this but i just wanted to ask and see if i can get a quick answer here so i'll know what to expect.

Insurance will offer you a price for the totaled car. That amount will be used to settle the loan and if there's any left-over you'll get that. Be careful with your offer for the vehicle and be sure that it's a fair-market replacement value and not some kind of wholesale auction value. They should give you the cash to actually replace the car at retail not some trade-in related price. You can negotiate this value and your claim is not 'closed' until you accept the offer.

You go on paying unless your insurance liquidates the debt.

I think there is something you are not understanding here.

Normally insurance would liquidate the debt & if there are monies over from that liquidation you would enjoy them. i.e the equity you might have built up in the vehicle.

You need them to present the math to you.

Oops! ditto - posted at same time.

i hope this is true, the guy i spoke to this morning said that there will be no reimbursement since the car wasnt paid off yet. He said he'll get all the paper work ready tomorrow so i should find out about it by tomorrow. So lets say if i still owe 14k on the car and the insurance offer me 8k that means i still owe the bank 6k on my loan. Does this mean i still have to continue making payments until i pay the 6k off? This is my first car and my first auto loan through a bank so this is all new to me. I would hope that i wont get to continue making payments since the car was in an accident that was unavoidable. I've heard of stories about people that cant make payments for their car anymore so they reutrn it back to the bank and really messed up their credit. I dont want to have bad credit so if i still have to continue making payments i will do so but its kinda lame to be paying for a car that is no longer here.

Can u explain more about the liquidating part? Sorry but this is all new to me.

If the current balance on your car loan is $14K and the value put on the totaled car is less than that $14K, then you will need to pay the difference to the bank. No choice. This is called negative equity.

On the other hand, if the value put on the totaled car is greater than $14K, the difference [between the value of the car and the loan amount] will be given to you by the insurance company. In this scenario, you have 'equity' in the car.

+1 - far better put than my effort!

In SA you would have to be insured to cover full outstanding to the bank or you would not get a loan. I've forgotten the US custom/convention. Finally left there in 2001. I'm sure pcy can fill you in.

thanks, this makes sense now.

Did you have GAP insurance? I added GAP insurance to my auto when I first got it, Just in case. If they only give you fair market value and you owe more than that they will pay the difference plus fair market. Its worth the $20 bucks extra on the plan...

so i just talked to my dad and he mention something about purchasing a gap insurance and i think i did. My dad said if i did purchase the gap then i wont have to pay the remainder back. I'll be going to my bank tomorrow so i'll find out about it anyways just wanted to get some answers ahead of time. Thanks to all that replied.

just talked to my dad and he just mention that to me. As a matter of fact i believe i did purchase the gap insurance.

That is indeed good news!

just got home from work and checked through my files and i did indeed purchase the gap protection! Yess!!

Great you have GAP insurance, but try to get them to give you more for the car's replacement cost.......go on internet and show them examples/pictures of similar cars for sale with similar mileage.......search/pick the highest values and submit to them in your argument for more of a settlement.......I did this once and got $ 16k versus original $ 9 k offer (and bought a new MINI)........

If you have any great pictures of your car looking good near the date of loss, show that also........don't let them lowball you, be aggressive, you have nothing to lose now........as you will have to replace the car and may need the funds.....good luck in your negotiations...

Great! - Don't take any crap from insurers - be firm with them as others have suggested. If you are young & feel that they might short change you take some crusty old bugger along with you to poke his jaw in their face.

how do i check the value of my car on kbb? im on there site now and enter the info of my car and it came to 20k. I know its not worth that much. My car is a 2005 c230 silver kompressor with 44k miles on it right now. decent condition, just bought the car a lil over a year ago (nov.09) with 34k miles when i bought it. Dvd navigation, black leather interior, front/rear side air bags.

Here is what I got for my area. I guessed on some of your options.

http://www.kbb.com/used-cars/mercede...&mileage=44000

GA

Gavonder- thanks bro! i'm gonna print that out and mention it tomorrow to the insurance company.

I dont think im understanding this correctly, im still making payments on my car, so what do u guys mean by the insurance will offer me a price for my car? The car hasnt been paid off yet. On KBB the value for my car in good condition is at 16k, so are u guys saying the insurance is going to pay me 16k or close to that if i prove my car is still in good condition? Even though i didnt pay off the car yet?

The whole purpose of insurance is to cover repair costs, replace a totaled car, etc.

You lost your car so insurance will essentially reimburse you for it because that's why you pay that monthly premium. The money they give you to reimburse your totaled car will go towards paying off your debt on said car. The market value will determine what it's worth, pre wreck, and that's what they will offer you. Hope that helps

Also, if you have access to the car, start ripping off good pieces to sell here, ebay, etc. Extra money.

The idea is that if you owe 16K and the insurance will offer you fair market retail value for it, if its valued at under 16k then you will get what they decide its worth which let say is 12k. Then you have gap coverage which comes in and eliminates the rest of the -4k you owe making your car paid off, the ins company gets the title and the loan is paid off and you are free of any more debt and payments to it.

GAP is great since almost any car ends up deprecating faster then any one can pay it off, I recommend it to every one, its a 400-800 dollar option that can save you 1000s.

Also usually gap pays off exactly what you owe, they dont give you more, check your gap coverage papers usually they dont allow payouts over the total of your loan.

If your making payments, ins pays what its worth not what you owe in payments, GAP pays what you owe in payments regardless of worth


If you owned the car the idea of insurance is giving you money to but the exact same car you had at time of loss. AKA if yours was a C240 with 40k they are supposed to give you what it would cost to get the exact same car, if you could find one with your same model/millage and condition, rarely does any one re-purchase the same model however.

thats illegal and considered insurance fraud, you need to clear it with your insurance before you remove any part, aftermarket or otherwise.

Thanks for pointing that out as I clearly forgot to mention it.

A lot of people with totaled cars are able to part it out though, but like he said clear it first.

ok cool, i get it now. Thanks.. yea im so glad i got the gap coverage, i wasnt gonna get it at first because the bank wanted an additional $299 for it and i was just so happy that i got approve for a loan and i had put down 1k on my car so i didnt want to spend any more money but my sister insist that i get it just in case. Im glad i did, i will find out what happens tomorrow, thanks guys for the help.