i got into a car accident recently and i finance my vehicle, if my car is total loss what will the bank do????

Question

my vehicle could be a total loss but ive been making a years worth of payments, do i loose the money or is it applied to another vehicle i purchase

Answer 1

If it's totaled...The insurance company estimates what the cost of repairs are.....if the cost to fix is more than what the car is worth...they estimate the fair market value and pays the lienholder(bank) first. If there is any money left you get the balance....if the car is worth less that what you owe....you still end up having to pay the bank back the balance.

Answer 2

The insurance company will make an estimate of what was your vehicle worth, if you owe more than what the vehicle is worth you might have to pay the bank the difference, I suggest you get GAP insurance for your next vehicle that will cover the difference between what the vehicle is worth and what you owe that way you at least break even. Good Luck!!!!

Answer 3

I think you wait for the total loss payment on the car too arrive from the insurance company and pay off the car with that. Not certain though.

Answer 4

Unless you have some INCREDIBLE policy that gives you another 1 year old car, you are about to find out the hardship of auto accidents.

Car insurance doesn't usually work like that. Say your car was $18,000 new and you paid $ 400./month for 12 months. You might see it as- I'm out $ 4800. and a 1 year old car.

The insurance company computes it as:
Drat!! He has a bank loan for $ x (payoff amount)
It has depreciated to a value of $ y (what they call cash value)
We'll offer him $ z (a settlement that's MINUS your deductable)
And he owes the difference in the payoff himself ( Ouch)

No lie, it happened to two of my friends.

I truly hope your situation ends up ALOT better.

Answer 5

Your insurance company will pay out the value of the car if you have full coverage. You will need to pay the bank from that check.