Who owns my wrecked Blazer?

August 5, 2008 11:59 PM

My car was crashed into and it's not worth repairing. Who gets the metal that used to be a Blazer: me or the bank I was making payments to?

Somebody crashed into my Blazer a few days ago and rendered it useless and beyond feasible repair (i.e., not worth fixing). I still had a few thousand dollars left to pay on it to the financial bank place who will most likely directly get the check from the other guy's insurance thus paying off what I owed them. So who gets the hunk of useless Blazer sitting in a warehouse? My name is on the title and everything, so would the car be my property if the bank is getting paid off anyway? I could sell it to a junk place for a couple hundred or more so I'll at least get something out of this mess.

And another question for anyone experienced in insurance-type stuff: providing they had adequate coverage, should their insurance company also reimburse me for the car as well? From what I've been reading about online, it seems that I will be screwed from this whole mess. The other driver was completely at fault, and their insurance is paying for my car (to my bank, to pay off what I owe); but that leaves me without a car to drive! I only had collision coverage, and the accident wasn't my fault. I'll be speaking with a lawyer about suing for damages and losing my only method of transporting myself and my kids, but maybe one of knows something about this stuff.

posted by mithiirym to travel & transportation (9 answers total)

If it is indeed a total loss, the insurance company that settles the claim will get the car. You may be able to buy it from them, but what's the use of that? It is your bad fortune that you have no equity built up in the car. If you really do owe more than what the insurance company will pay for it, you may still owe the bank.
posted by Daddy-O at 12:06 AM on August 6, 2008

When my car was totalled, it was hauled away for free; in exchange the towing company got to turn it in to the junkyard for parts/materials.

I hear a lot about people being "upside down" in car value vs. car loans, it sounds pretty common. I guess that's what's going on here, or close to it. Basically, I'm not sure it would make sense for the insurance company to pay for a car on top of the money that it's already giving you. Think about it this way: suppose someone bought a 40k car and then it was totalled. They have a 40k loan. Does it make sense for the insurance company to give them more than 40k so they can pay off the loan and have a new car also?

Yeah, this really sucks for you. I'd buy an old used car and save until you can buy a car with a bigger down payment. By putting down a larger down payment, you won't be sending as much of the insurance settlement back to the bank.

Glad you consider AskMe a useful resource and hope to see more of you all over the site.
posted by Deathalicious at 12:40 AM on August 6, 2008

Is it certain the bank would get the insurance check? You owe the bank money, regardless of the state of the car... insurance should probably be paying you the value of the car.
posted by TravellingDen at 1:52 AM on August 6, 2008

The question here (which some above made assumptions about) is whether the value of the car is more than the amount you still owed. The insurance goons owe you for the value of the car, not just the amount you owe the bank. The bank gets paid off, that frees you from making car payments on the wrecked vehicle. Any equity you have built up goes to you. Ideally, this should allow you to go out and make a down payment and finance a new vehicle, perhaps with the added benefit of one getting better gas mileage (which has the added benefit of being a car that will hold more value over time, these days).
posted by Goofyy at 2:00 AM on August 6, 2008

The insurance company own your car, but if it has been totalled it will now have a salvage title stating so and the insurance company will sell it to you for the same price a junkyard would pay, which may be only a few hundred dollars. If there is a lien holder listed on the title they will get their share of the money first. If you have no-fault insurance your company will pay regardless of whose fault it was up to a certain amount and beyond that the two insurance companies will fight it out amongst themselves. If there were injuries, time off from work, rental expenses, etc. you may well get reimbursed for that. The details on how all this is implemented vary widely from state to state, company to company, and policy to policy; the best person to ask for details specific to your situation is the agent who sold you your insurance.

Two examples of how it can play out: Friend A: owes more on a car than it is worth, minimal insurance, gets in a wreck and totals the car-is now making payments on a car sitting in a junkyard somewhere. Friend B: relatively inexpensive vehicle, good insurance. Hit by an uninsured driver, vehicle totalled, broken leg, out of work for 6 weeks. Doesn't lose money from work because of sick leave and vacation sufficient to cover the six weeks, medical expenses are covered, but still gets a six-figure check from the insurance company for all potential expenses,plus pain and suffering, loss of consortium to his wife, and so on. He still limps but financially came out ahead.
posted by TedW at 2:28 AM on August 6, 2008

Since your car was hit by a second party, their insurance will be the ones cutting you a check for your totaled vehicle. You should contact your insurance agent and discuss what leverage you have to re-coup both the balance of your car loan along with replacement value of the car itself.
posted by Thorzdad at 6:34 AM on August 6, 2008

If you're not injured, all the insurance company owes you for is the value of the car, plus a rental car for a reasonable duration until you can buy a new one.
posted by electroboy at 6:51 AM on August 6, 2008

When my brand-new car was totalled, the insurance company sent the check directly to the bank, and I got reimbursed for my own expenses.

The insurance company is under no legal obligation to pay you more than what the car is worth at the time of the accident, so if you owe more than it's worth and you don't have gap coverage, you're SOL.
posted by dirigibleman at 11:20 AM on August 6, 2008

Do you have gap coverage? Many lenders require it. If you have it, it will kick in if you owe more on your car than the insurance company will pay for it. However, keep making car payments until this is all settled!
posted by Monday at 11:33 AM on August 6, 2008