Recently I had to take out a loan and to do so I used my car as collateral. My car was 8 years old but running ok. Well shortly after taking out the loan all sorts of problems requiring repairs happen and then to top it off recently someone ran into my parked car. I took it to the shop but just recently was told that the car is a "total loss". I was shocked because the damage didn't seem that bad but apparently it means the cost to repair exceeds the value of the car and they said my insurance company will likely try to settle with me.
so Question1 - what exactly does this mean that they will settle with me?
Question 2 - What are the ramifications of the fact that I am using this car as collateral.
I have no idea as all this was just hours ago told to me so any help or advice is appeciated.
2007-02-14 11:16:13 · 3 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
The insurance company will keep the car and pay you blue book value.
Because you used the car as collateral, you have to pay the money back in full.
2007-02-14 11:23:59 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Settle means they will give you book value for the car. You can look it up in blue book value to see what it was worth. Then make sure the ins. Co. gives you that amount. You are still responsible for the loan. Pay it off. If you are able you may get a loan for another cheap car depending on your financial standing which I say is shakey right now. If you get anything above the loan use it as downpayment on another car, maybe it will run better than the one you just lost and you will come our ahead, don't mention it was in bad shape, act like it was a beauty. Make sure you don't allow them to give you less than it is worth. I hope you do ok. Get a couple of jobs and get back on your feet. Good luck.
2007-02-14 11:24:08 · answer #2 · answered by MISS-MARY 6 · 0⤊ 0⤋
If they settle, it's a set price that they will give you for the car. Usually blue book value. Maybe a tad less. Nothing more.
If they gave you a loan on the car, and it is totaled, there is really nothing they can do. It done for. Even new cars get totaled. But I would let them know that it was. Because that was their collateral, they have none now.
2007-02-14 11:28:04 · answer #3 · answered by Shari 5 · 0⤊ 0⤋