2007-05-10 15:53:01 · 5 answers · asked by s m 1 in Business & Finance ➔ Personal Finance
That is what is called in the car business, "out of round" or being "upside down." You owe more on the car than the car is worth. The only thing you can do is make the payments and say a little prayer that you don't get in an accident because you will not get what you owe but what the value is from the insurance company if you have full coverage. This happens often because of depreciation and really happens often if you are the kind of person that trades in their vehicle often. The reason is the spread between the wholesale value and the retail value.
2007-05-10 15:57:58 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You have to have full coverage on a car you are making payments on. You can have liability or full coverage on a car you have paid off. But, like anything else you can only get coverage for what the auto is worth. Some companies have started promising replacement cost as opposed to reimbursing you for the worth of the vehicle. I gotta think theres a catch somewhere.
Anyway, if the car is worth 6k then that is what they will give you if you total it. The fact that you may owe more or less is of no consequence. It's one reason that new cars-which lose value like Enron-are really a bad deal. I've made that mistake, but my wife and I are saving up to buy a late model used car with cash. Like the guy wrote before, the Dave Ramsey way.
2007-05-10 23:34:57 · answer #2 · answered by ontopofoldsmokie 6 · 0⤊ 0⤋
This is called being "upside down" on your car value. Go to daveramsey.com and the information he has will tell you how to get out of this dilemma.
2007-05-10 23:01:28 · answer #3 · answered by bevrossg 6 · 0⤊ 0⤋
What do you mean, "protect it"? Can you get out of paying the other $800? No.
2007-05-10 22:58:26 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Just have car insurance and keep paying your loan.
2007-05-11 10:48:15 · answer #5 · answered by Cookie 3 · 0⤊ 0⤋