How do finance companies handle total car accidents?
My car was totalled in an accident.
I was blessed to be able to walk away.
I had full coverage; but I don't know how the finance company handles things.
Will they take the insurance check?
Will they help me get a new car?
The car was used and I have only made one payment.
- oklatomLv 71 decade agoFavorite Answer
No, they won't help you get a new car. If they decide your car is totaled after the adjuster looks at it, they will issue a check to the lender for the fair market value of the car. If that is less than the amount you owe you will need to keep making payments until the balance reaches zero, unless you have GAP coverage. GAP coverage will pay the difference between what you owe and what you get from insurance. Of course if you were at fault, and your collision is covering, the check will be less the amount of deductible if any.
Your best source of answers to any questions you might have will be your insurance agent.
- Anonymous1 decade ago
Report it to your insurance company and they'll let you know exactly what they need. They pay actual cash value under normal circumstances. They will contact your finance company, get a payoff. If the value is less that the payoff, your gap insurance will handle the rest. If you don't have gap insurance, your responsible for the money left on the loan.
If you were financed once, they should help you with a loan again.
- 1 decade ago
Check your policy, find out what the maximum coverage they offer in case of total collision....a few years ago I totaled my truck out, I had it less then a year, the insurance covered 15,000, but left me owing 3,000. And as it turned out, since I was using the same finance company to cover my car, they were legally able to repo my car- which I wasn't behind on- to cover the 3 grand.
I'd definately find out how solid your policy actually was....