I totaled my car. No insurance. Still owe money to the bank! Want to refinance. Help!!!?

Question

Ok here's the deal. I financed a car through a dealership (1st time buying a car) and got completely taken. I didn't understand the paperwork, and the person selling told me that the GAP insurance would take care of me if the car was totaled. What I failed to realize was I needed to have full coverage to have the GAP insurance!! I only have liability insurance.

I totaled the car. I still owe $8000 to the bank. I've had the car for 8 months and the bank has never come after me to get full coverage insurance; I'm not sure why. I haven't told the bank that I totaled the car, and I'm trying to pay the loan off as quick I can. In the mean-time I've kept the liability insurance on it, so as not to alert the bank, but I would rather drop the insurance since it is just wasted money at this point. I also want to drop the GAP insurance and the extended warranty they sold me, but again I don't want to alert the bank that I don't have full coverage.

Any advice appreciated!!!

Answer 1

Better take this one to your lawyer. The way I understand it, when you take out a loan the lein-holder has you sign a declaration that you have FULL insurance coverage. From the banks perspective you may have committed a fraud, & by witholding this information after you have become fully aware of what you are in to they now have all the more reason to take that position. Now when I had a car loan with the bank. Not only did I have to prove that I had proper coverage in case the vehicle was completely destroyed in an accident. The Insurance company also had to provide that documentation directly to the bank. So I have to wonder why that didn't happen with you?
You may have been pretty naieve here but sombody didn't do their due diligence.
That's why I say you need a lawyer to sort it all out. You may not be in as deep as you think.

Answer 2

Refinance what? A worthless hunk of metal? I'm sorry that you got taken at the dealership. That happens to a lot of young people purchasing vehicles for the first time. You've learned a valuable lesson, huh? The state (whatever state) requires full coverage insurance on any car that has a lein on it.... FOR THE SPECIFIC PREDICAMENT THAT YOU ARE IN RIGHT NOW!!!! You are basically screwed. The best thing to do is make a lump sum payment of $8K on the PRINCIPAL AMOUNT on your car (if you pay the interest, it doesn't make the amount you owe on the car any less, it's just padding the bank's pockets), and part out what you can engine wise.

You know what to do next time you buy a car.

OR............ you can stop making payments, get your sh*t repossessed, get TERRIBLE marks on your credit, and when they come to get it, just point over to the heap of metal and say, "well, the thing about it is....."

Good luck.

Answer 3

usaully the bank is more on top of it...... they usually require full coverage to be provn, and gap insurance is just based on the down payment.....

maybee, it is just not a great bank, and they have not yet realized the hole in the insurance.

i would guess that the bank will only come after you if you stop making payments on the loan.... i don't think there is an easy way out of this, but as long as the bank is getting thier money, they should back off.

Answer 4

ok for starters every bank whenever you get a car from a bank or loan on a or for a car you have to have insuranse its there job to insure it if you dont have any so youre car is probably covered in all those papers you signed they have to protect there money and just add it to youre balance to insure it so you have full coverage just on the car and dont no it

Answer 5

Honestly? Either way you're screwed. I'd call the bank, tell them the truth, and see what they give you for options.

Answer 6

As screwed as you are, you have to tell the bank. It's their property, not yours, and they have a right to know.

Answer 7

Sounds to me like it just ain't your day.