Ughhh, insurance question

[DrPizza]

Car was hit; minor damage all over the place. However, the number of parts with minor damage has led to the insurance company wanting to declare it a loss.

What happens if the book value is less than what's owed on the vehicle? (Wife foolishly paid for an extended warranty - salesperson saw a sucker and took advantage - she'd get a 2% drop in interest rate if she paid for the extended warranty.)

Anyway, the warranty led her to be upside down on the loan. Any clue what to do/what happens if they offer a settlement for less than what she owes?

Also, how does it work if we also wanted to purchase the vehicle back for its salvage value? (I or my son could easily repair the damages, except to the back driver's side door.)

 

[BrunoPuntzJones]

She's gotta come up with the money. Gap insurance prevents such an instance

 

[compuwiz1]

Originally posted by: DrPizza
Car was hit; minor damage all over the place. However, the number of parts with minor damage has led to the insurance company wanting to declare it a loss.

What happens if the book value is less than what's owed on the vehicle? (Wife foolishly paid for an extended warranty - salesperson saw a sucker and took advantage - she'd get a 2% drop in interest rate if she paid for the extended warranty.)

Anyway, the warranty led her to be upside down on the loan. Any clue what to do/what happens if they offer a settlement for less than what she owes?

Also, how does it work if we also wanted to purchase the vehicle back for its salvage value? (I or my son could easily repair the damages, except to the back driver's side door.)

she'd get a 2% drop in interest rate if she paid for the extended warranty.

That is an illegal sales practice.
Have her cancel the extended warranty. The amount of the refund will depend on how long the car has been in service and how many miles since purchase date.

If the book value is below the amount owed and you can't negotiate to get full payoff, you're responsible for the difference. If she bought Gap insurance, then once the primary insurance has paid what they are going to pay, then you have to file a separate claim with the Gap insurance co.

 

[Old Hippie]

Anyway, the warranty led her to be upside down on the loan. Any clue what to do/what happens if they offer a settlement for less than what she owes?

Was the amount of the warranty included in the loan?

 

[sjwaste]

If you settle for less than what you owe, you owe the remainder, plain and simple. I think you have some more negotiating room if you're going through the adverse carrier rather than subrogating through your insurer, assuming this was a not at fault accident for you.

 

[DrPizza]

Originally posted by: Old Hippie

Anyway, the warranty led her to be upside down on the loan. Any clue what to do/what happens if they offer a settlement for less than what she owes?

Was the amount of the warranty included in the loan?

Yes, it was. As far as gap insurance, she had never heard of it before; I wonder if it was even brought up when she purchased the vehicle.

 

[DrPizza]

I understand that she would owe the remainder... that's pretty much common sense. I guess a better way to phrase the question is, when they settle during the next couple of days, does she have to cough up the $$$$ then, can she roll it into another car loan? etc.

 

[compuwiz1]

Originally posted by: DrPizza
I understand that she would owe the remainder... that's pretty much common sense. I guess a better way to phrase the question is, when they settle during the next couple of days, does she have to cough up the $$$$ then, can she roll it into another car loan? etc.

She should be able to continue making monthly payments on what insurance doesn't payoff. The lender should be called and arrangements made. They should be able to allow some kind of a payment arrangement.

 

[Old Hippie]

when they settle during the next couple of days, does she have to cough up the $$$$ then, can she roll it into another car loan? etc.

Can't see how they could make ya do that....although, the physical car is the collateral for that loan.
I'm sure Compuwiz1 has the correct answers for this.

 

[DrPizza]

Good, then all I have to do now is the tough part: convince the insurance company to sell the car back to me for the scrap value. "That'll buff right out" isn't too far off the mark.

 

[EagleKeeper]

I have had that situation happen twice w/ respect to the cost of repair being more than the value of the vehicle.

Of course that vehicles were 10+ years old.

The insurance company will have a salvage yard estimate of $100-$250 possibly for the scrap car, depending on year and damage.

If you want the car back, they will just deduct that value from the settlement.
there will be no argument on that regard - usually by law, you have the right of first refusal.

Some insurance companies will low ball you (Allstate, State Farm) as to the value of the car.
You may need to fight for any extra $500-$2500.

Now, depending on the state, the vehicle may have a salvage title issued.
The vehicle may then have to have an full inspection before it can be registered.

Nevada requires a licensed mechanic in the state to do the inspections - the vehicle can not have the registration renewed without it. And they told me that 1 day before expiration and I was 3000 miles away.

 

[Vette73]

What is the year, model, make, and milage/condition?

Has the insurance company made a offer yet? And what is owed?



If the numbers are close they will pay it off. You can even use the "but we owe XYZ on it..." and that will make them move a little. You can also print out 5-6 other cars that match yours same make, model, and year and fax them over to show what cars like yours are selling for. That will make them bump it up. they always low ball first then give areal offer after you do those 2 things. And as others have said you can get the car back, minus what a yard wil pay, and not fix it and just keep driving it. Use the money to pay it off and drive it until it won;t move any more while saving up for another car a year or 2 from now.

 

[Scarpozzi]

Just don't take their first offer. What they go by is the Fair Market Value instead of the Blue Book. Usually the FMV is less than the BB and you'll end up with a gap between what you can actually find your vehicle for if you were to replace it.

 

[JulesMaximus]

Originally posted by: DrPizza

Originally posted by: Old Hippie

Anyway, the warranty led her to be upside down on the loan. Any clue what to do/what happens if they offer a settlement for less than what she owes?

Was the amount of the warranty included in the loan?

Yes, it was. As far as gap insurance, she had never heard of it before; I wonder if it was even brought up when she purchased the vehicle.

That sucks. So, not only did they get her for the warranty they also get to charge her interest on that amount.