Had a 3 year loan on my Car but crashed it...?
When I bought my car, I had 3 years to pay it off... But was in an accident and crashed it. Is there anyway out of this loan somehow so I dont have to pay continuously for this car if I buy another one?? Or to lower the payments dramatically, even?
- Stupid FlandersLv 78 years agoFavorite Answer
No. You use the money you have from your collision insurance to either pay off the loan (if totalled) or get the car fixed.
This is why you are required to have full-coverage insurance whenever you take out a loan.
If you owed way more than the car is worth, then you should have bought GAP insurance. If you didn't, then the difference between the loan amount and the check the insurance company gave you for the car is your responsibility to pay.
- monheganLv 48 years ago
This just happened? You had an auto loan? Insurance was required, wasn't it?
You will get a settlement for repair, or if "totaled" in which case the insurance company gets what's left of the car. You can take that settlement and pay off as much of the remaining loan as you can.
You are still responsible then for the balance.
That said, you still have lots of options to minimize your costs. The firm that holds your note may also have repossessed cars that you could buy at discount, and then they might roll the balance of your outstanding loan into a single loan on a replacement car, so you have a one monthly payment. Or a quality used car, even new car company could work on this with you and the lender.
That's usually what happens.
Some people pay a little extra on their insurance (you have to do this before you have trouble) so that in case they do have a car "totaled", and they are "upside down" (owe more on the loan than the car is worth) they can have the insurance company pay off the entire loan.
Too late now but something to consider, ask your insurance agent. This is one reason why it is good to work with an agency where you can talk to experts face to face in person.
- pmc123Lv 68 years ago
The car was collateral for the loan. You are required to use any insurance payment to pay off the loan. If that payment doesn't satisfy the loan, you will need to continue making payments on the loan until the balance is paid in full.
- How do you think about the answers? You can sign in to vote the answer.
- Anonymous8 years ago
If only it was that simple. You signed a contract promising to pay the lender a specific amount of money over a 3 year period. The money is owed regardless of what happens to the vehicle. Did you have insurance? Since you financed the vehicle the lender should have required full coverage for the time of the loan. Your insurance should pay off all or most of your loan.
- Bill WellsLv 68 years ago
You signed the contract for this loan, even crashing the car, you still have to pay for it. You could talk to them about lowering payments but it's up to them. Didn't you have full coverage sense the car was financed?
- 8 years ago
Your insurance should pay it off and give you money for repairs. They did for my moms car a few weeks ago