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i am assuming the following: your vehicle totaled, you do not have GAP insurance and the value of your vehicle was less than your payoff...unfortunately you will still owe this balance, most lien holders will do what they call a 'transfer of collateral'' meaning they will finance (assuming you are in good standing) if you want. your replacement vehicle and put this balance on top of that note....immediately making you really upside down AGAIN ...pleeeeeeeeeeeeeease get gap insurance on this one, talk to your lien holder about it...gap insurance pays the 'gap' between the value of the vehicle and the note balance..

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โˆ™ 2011-09-12 21:33:57
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Q: If the insurance does not pay the amount due on the vehicle what happens to the loan?
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What happens if your car is stolen and you still owe on the loan?

If the vehicle is/was encumbered by the original loan then it should be insured. If there is no insurance or the insurance does not cover theft the purchaser is still responsible for the full amount of the loan. The issue of the vehicle being stolen does not affect the legal responsibility of the buyer to honor the loan contract.


What happens to your title loan if your vehicle is stolen and wrecked?

Since you have a loan you should be required by the lender to have full coverage insurance which will pay you the value of the vehicle. With out insurance you are still responsible for repaying the loan no matter what happens to your vehicle. It is not the lenders fault your car was stolen and wrecked...


Can a cosigner on an auto loan get insurance on the vehicle?

Yes


What happens if your car is totaled and you are paid up on your insurance but not on your car loan will it be repossessed?

The insurance company would not be interested in repossessing a car that has been completely demolished. The insurance company will pay over any damages to the loan company since it has a lien on the car. You would receive any amount remaining after payment of the car loan. On the other hand, you will be responsible for any remaining balance owed on the car loan. That is why "gap insurance" is important for a financed car. Gap insurance pays when the amount of compensation received from a total loss does not fully cover the amount the insured owes on the vehicle's financing.


Do you have to pay the bank back for a vehicle if it gets wrecked and the bank pays it off?

Yes, unless the amount of the loan was covered by the insurance.


Is it legal to have GAP insurance and also have full auto insurance by another agency on your car?

Yes as they are two different things entirely. GAP covers the difference in what the insurance pays and the amount owed on your loan for the vehicle. GAP will not pay you a nickel yourself. If the actual cash value of the vehicle is more than the amount owed on the loan the GAP pays nothing at all.


What happens when returning a car to a financial institution and the car is of less value then the loan amount owed on the vehicle?

The lender will expect you to pay the deficiency which is the difference between the amount owed on the loan and the amount they get for selling the car.


Can you still get insurance and registration if your hiding from a loan company on a vehicle?

If you have defaulted on your loan and not returned the vehicle, then you have basically committed a theft.


Who pays remainder of loan when car is totaled?

It depends. if you have GAP insurance, the insurance company will pay the payoff amount. If you do not have GAP insurance, it is the holder of loan's responsibility to pay off the complete open loan regardless of the amount paid by the insurance company.


What is collision auto insurance?

Collision insurance pays for damage that happens to your vehicle in an accident if it is your fault. It does not pay for the other vehicle or property involved in an accident. It is not required by law but it is highly recommend especially if you financed the vehicle and are still paying off the loan.


If you cannot make the payments on a vehicle which was 38000 on purchase and is now worth 28000 what happens if you take the vehicle back to the bank?

you are responsible for the whole of your loan, no matter the depreciated value of the vehicle. the amount of your loan does not change. That's it, you owe 38000


Can your insurance company takie loan car without paying you out all the money?

What an insurance company pays for a total loss vehicle has nothing to do with the amount owed on the car. Auto insurance is based on the actual cash value of the vehicle while the amount owed on the loan has nothing to do with the ACV of the vehicle. If a vehicle is totalled and you owe $5000 and the ACV is $8000 the company will issue a check for $5000 to the finance company and a check to the policyholder for $3000. If the numbers are in reverse the insurance company pays the ACV of $5000 and you still owe $3000 to the finance company. It happens when you pay to much for the car, build up interest and fees, add other amount to the loan like if you were upside down in the last loan and they add the balance to this one. Anyone purchasing or leasing a new vehicle should ask their agent about GAP insurance. Because a new vehicle depreciates so fast at first you need this coverage. The dealer finance department will sell it to you for a chunk of dollars and your insurance company will sell it to you for a couple of dollars a month. The difference is amazing. GAP pays the difference in what the ACV is and what is owed on the vehicle.

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