for those with accident experience
04-14-08, 11:30 AM
#1
Lead Lap
Thread Starter
for those with accident experience
i here of the is curse so i wanna be prepared. if someone hit you and totaled your new car that isn't paid for. what happens does thier insurance give you a check for what the car is worth?
04-14-08, 12:13 PM
#2
Lexus Fanatic
Typically, if you are the middle of a "Retail Installment" contract, there is a Loss Payee clause with your full coverage insurance that will pay off the car. You still end up loosing especially, if you put money down on the car.
04-14-08, 12:38 PM
#3
Yes.
But don't forget that the price offer of the car is not final. Insurance wants to take advantage of you, and will low-ball the value.
Make sure that you let your insurance company and even the financial lending institution is aware of the situation. Sometimes, they can help.
But don't forget that the price offer of the car is not final. Insurance wants to take advantage of you, and will low-ball the value.
Make sure that you let your insurance company and even the financial lending institution is aware of the situation. Sometimes, they can help.
04-14-08, 01:50 PM
#6
Gap insurance is only for people that buy cars more expensive than they can really afford. It is marketted to the same type of people that buy extended warranties, $0 insurance deductibles, and lotto tickets.
To answer the original question, if there is a lien on your car, then the lien holder really owns the car, so the insurance company would write the check to them. If the car has a value higher than the lien amount, then the lien holder would refund the difference to you. Otherwise, you will need to pay the remaining balance of the loan to the lien holder. Gap insurance would pay this amount, but as I said above, if you are so upside down on a car loan that you can't possibly pay the difference, then you shouldn't have bought the car in the first place.
To answer the original question, if there is a lien on your car, then the lien holder really owns the car, so the insurance company would write the check to them. If the car has a value higher than the lien amount, then the lien holder would refund the difference to you. Otherwise, you will need to pay the remaining balance of the loan to the lien holder. Gap insurance would pay this amount, but as I said above, if you are so upside down on a car loan that you can't possibly pay the difference, then you shouldn't have bought the car in the first place.
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04-14-08, 02:37 PM
#8
This depends on you! (age, driving record, ect...)
I work for an insurance company and if you qualify for our prefferd insurance then the car would be paid off in full even if you are upside down. We do not offer this on our tier 2 or 3 level Auto policies. You would need something like GAP insurance. We also have a unique feature that other insurance companies do not offer where we will replace you with a NEW car and title of that car to the lein holder or "lease" company. The great thing is you get to either A. own a new car whend the original note is paid off in full or B. buy out the lease just as if it was that 3 year old car (typical lease is 36 mos so just exp) How is that for a great company to back you up!
No one wants to see any of this happen but no one can control these unfortuate situations. All you can have is peace of mind to know that you are covered.
I work for an insurance company and if you qualify for our prefferd insurance then the car would be paid off in full even if you are upside down. We do not offer this on our tier 2 or 3 level Auto policies. You would need something like GAP insurance. We also have a unique feature that other insurance companies do not offer where we will replace you with a NEW car and title of that car to the lein holder or "lease" company. The great thing is you get to either A. own a new car whend the original note is paid off in full or B. buy out the lease just as if it was that 3 year old car (typical lease is 36 mos so just exp) How is that for a great company to back you up!
No one wants to see any of this happen but no one can control these unfortuate situations. All you can have is peace of mind to know that you are covered.
04-14-08, 03:14 PM
#9
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Gap insurance is only for people that buy cars more expensive than they can really afford. It is marketted to the same type of people that buy extended warranties, $0 insurance deductibles, and lotto tickets.
To answer the original question, if there is a lien on your car, then the lien holder really owns the car, so the insurance company would write the check to them. If the car has a value higher than the lien amount, then the lien holder would refund the difference to you. Otherwise, you will need to pay the remaining balance of the loan to the lien holder. Gap insurance would pay this amount, but as I said above, if you are so upside down on a car loan that you can't possibly pay the difference, then you shouldn't have bought the car in the first place.
To answer the original question, if there is a lien on your car, then the lien holder really owns the car, so the insurance company would write the check to them. If the car has a value higher than the lien amount, then the lien holder would refund the difference to you. Otherwise, you will need to pay the remaining balance of the loan to the lien holder. Gap insurance would pay this amount, but as I said above, if you are so upside down on a car loan that you can't possibly pay the difference, then you shouldn't have bought the car in the first place.
But yeah, Gap insurance is only for people that owe more on the car than what it's worth. For example, say the IS you bought was $38,000 otd....but you only put down $1,500 for the down payment. Well once the ink was dry on the contract and you drove the car off the lot, it depreciated at least $4,000 off of the $38,000. This is when you would need Gap insurance.
04-14-08, 03:25 PM
#10
So you are saying that you wouldn't be able to come up with $2K in a pinch to cover the gap? It isn't like the lien holder is going to send Guido to come bust your knee caps. You would have a couple months to settle the difference, and you could even put it on a credit card if you had to. If you still couldn't scrounge it up somehow, then you shouldn't have bought the car.
04-14-08, 03:39 PM
#13
You got it! My dealership tried to sell me Gap insurance at the time of purchase....what for? I told them "NEGATIVE!" because I gave them $20,000 for my down payment. They must have thought I was a dumb blonde.
But yeah, Gap insurance is only for people that owe more on the car than what it's worth. For example, say the IS you bought was $38,000 otd....but you only put down $1,500 for the down payment. Well once the ink was dry on the contract and you drove the car off the lot, it depreciated at least $4,000 off of the $38,000. This is when you would need Gap insurance.
But yeah, Gap insurance is only for people that owe more on the car than what it's worth. For example, say the IS you bought was $38,000 otd....but you only put down $1,500 for the down payment. Well once the ink was dry on the contract and you drove the car off the lot, it depreciated at least $4,000 off of the $38,000. This is when you would need Gap insurance.
I still think you are assigning too much value to gap insurance. Even if you put $0 down on a new car, and pay full MSRP for your car, you are really only upside down by a small amount according to the insurance company. The $4k depreciation that you are talking about is if you try to trade the car back in on something else the next day. Insurance companies pay blue book value, and in my experience even reimburse you for TT&L. I totalled a 9 month old car years ago (my fault) with 16K miles on it, and the insurance company paid me only $500 less than my "Out the door" price.