How does itworks,when your car get total lose but you still old money to the bank?

Question

How does itworks,when your car get total lose but you still old money to the bank?

Answer 1

If the check from the insurance company is not enough to cover the full amount of the loan, you're repsonsible for paying the difference. Most finance companies and banks will let you sign a seperate unsecured note for the remaining balance.

Answer 2

if you do not have gap insurance on the vehicle this is what you purchase additionally when you purchase your car for 500.00 and what it does if you car gets stolen or total or some thing of that nature and lets say you owe 7,000 on it and all the insurance gives you is 5,000 then you must pay back the 2,000 even if you can't drive it, but you see where gap insurance comes in the gap insurance will pick up and pay the rest of the amount to the bank, not a bad 500.00 investment. hope this helps.

Answer 3

that depends on if you have GAP insurance and if you don't then you will need to still pay the bank/finance company off

Answer 4

That is what the old timers call " recall" someone has been mischievous with your bank note signature. The bank doesn't give a warranty to cover your loss they look out for their own best interests and the less time you spend driving on borrowed money products the more profits they can earn. You continue to loose and they pretend to care by offering you more coverages. it's a sink hole.

Answer 5

if you do not have insurance then you have to keep paying for the car to the bank.

Answer 6

If your car sustains sufficient damage to exceed its value, it is considered totaled.  In that case, the insurance company will pay the policyholder the Actual Cash Value (ACV) of the vehicle (assuming they have comprehensive and/or collision coverage) less their deductible.  If the loan exceeds the ACV  of the vehicle, there may be a balance owing to the bank or lender.  There is an insurance to cover this difference known as GAP insurance.  I highly recommend it.  

If this has already occurred and you still have money owing to the bank, you are under contract to continue paying them.  If you do not, they can and will place a negative report on your credit.  You do have the option of defaulting on the loan, but that isn't advisable.

Answer 7

Most, if not all insurance companies only cover for the actual book value of you vehicle.  Say you obtain a loan and purchase a vehicle for for $15,000.00.   If you total your vehicle and the book value is $12,000.00, you still have a $3,000.00 obligation to the bank for the funds borrowed.

   $12,000.00    I          $3,000.00         I        $15,000.00

    Vehicle value         Gap in value       Purchase Loan Amount

                                 vs Amount Owed

Any time you purchase a vehicle, check if they offer Gap Insurance.  This coverage would pick up the remaining balance owed. Some may or may not, pick up the deductible.  You may also want to check with your agent. This type of coverage is pretty inexpensive.  Some Insurance companies also offer this coverage but not always on used vehicles.  Even on newer cars, this coverage may have a time or mileage limitation.  Have your Agent explain it fully

Answer 8

If the payoff is less than what you owe, you still owe the difference.