Car Totaled - Will I Keep The Payout?

Well my car was rear ended. Here in NYC, that happening means you re not at fault. Thankfully nobody was seriously injured, and faking an injury wasn t even on my mind, as I find it immoral. My insurance provider is USAA, whom already waived my deductible.

I m still waiting on the decision from USAA on whether it s considered a total loss, but the shop where it currently resides is confident it is; in his words "no shop in their right mind would touch this car" lol.

It s worth roughly 11k, it has been in one prior accident, however, and I owe 9k on the loan. It s a 6 year loan and I m on year 4, so it s two-thirds paid.

My dilemma comes in here: I have a pursuit which requires money and keeping this impending insurance payout would help my cause greatly. I m aware that the bank still possesses the title of the car, and the insurance company would need that title in order to salvage the car. I m also aware that the bank typically releases the title upon full payment of the collateral.

I know that bank terms vary and I ll need to talk to my lender, but I come to the yahoo community for some insight. Would it be possible to have the title released (because there is no more collateral and I m so far into my loan), continue making payments on the car until it s paid, and keep the money to pursue my endeavors?

15 Answers

Relevance
  • 3 years ago
    Favorite Answer

    I doubt it, but you are a thinker and trying to work out something that suits you. Keep thinking outside the square even if you don't always win.

    • Commenter avatarLogin to reply the answers
  • 3 years ago

    Nice try but you are asking for the bank to continue on a secured loan and the security just went booom. So NO you will not get the entire funds. You will get what the difference is after the loan is paid in full. Sorry

    • Commenter avatarLogin to reply the answers
  • 3 years ago

    Well, no. Although you're probably dead wrong on the lender owning your vehicle. No lender would write a title loan for a six year term, so it's probably just a standard secured loan. A lienholder is not an owner of a vehicle. Anyway...

    Banks and insurance companies always do this stuff strictly by the book, and in this case the book is the contract you signed with your lender and the one you signed with your insurer. Your contract with the lender says that a) your vehicle is used as security on the loan and that b) in the event of a total loss the bank will be paid off their interest in the vehicle (the remaining balance on the loan) before you'll be compensated. Your contract with the insurance company says that the bank is listed as "first loss payee" on the policy in the event of a total loss. All of the above are conditions that you agreed to in writing, as you know.

    The insurance company is going to pay the loan off to the bank first, and you'll get whatever (if anything) is left over. Insurance and loan contracts are always done by the book and to the letter, because there's literally no room for can't-we-just or doing it the easy way. They call it bureaucracy for a reason.

    If there's anything left after the bank is paid off (vehicles tend to depreciate faster than loan balances), you can do with those funds as you see fit. Put it towards another vehicle (the bank will gladly finance another vehicle for you), put it towards a new business venture, spend it on beer and strippers... it's your money.

    • Commenter avatarLogin to reply the answers
  • 3 years ago

    No.

    The loan us paid off first. Then you get the rest.

    What you do with your part us up to you.

    If you want to borrow money then talk to a bank separately.

    • Commenter avatarLogin to reply the answers
  • How do you think about the answers? You can sign in to vote the answer.
  • 3 years ago

    No. The terms don't vary. The bank gets however much is owed on the loan. You get whatever its left after that. For example, since you owe 9k on the loan, if the insurance company pays 11k, then the bank gets 9k, and you get only 2k.

    • Commenter avatarLogin to reply the answers
  • 3 years ago

    You get what is left over after the finance company gets what they are owed. You do not get to keep the payout and get to make payments later.

    • Commenter avatarLogin to reply the answers
  • Mr.357
    Lv 7
    3 years ago

    No. You will get a check made out for what ever amount made out to you and the lien holder. You will give the lien holder what ever you owe them, they will release the lien on the vehicle, and you can keep what ever excess there is.

    • Commenter avatarLogin to reply the answers
  • Anonymous
    3 years ago

    The bank gets paid first.

    You get anything that's left over, and can use that as a deposit on another car.

    You keeping the money is NOT an option as the loan security (the car) is gone. So the loan contract is cancelled, and repayable in full immediately. Luckily you have insurance that's takes care of this for you.

    If you need extra cash for some reason, you need to go and talk to your bank about a new loan.

    • Commenter avatarLogin to reply the answers
  • 3 years ago

    The insurance company will settle first with the loan company as they are no doubt lien holders on the vehicle. Any money left over once their debt is cleared will come to you.

    Before you get too excited there is a big difference between your ' worth roughly 11 grand' and what the insurance company values the vehicle at. Don't be surprised if you end up owing the loan company some money, which they will want paying immediately as their surety is gone.

    • Commenter avatarLogin to reply the answers
  • Tj
    Lv 7
    3 years ago

    the insurance co. will make the check out to your lender and you.

    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.