happy new year. i miss my car.
January 2, 2010 6:41 PM   Subscribe

Car Insurance Filter: I've searched but can't find an answer. My car was most likely totaled today by someone rear-ending me. However, I still owe $11K on it. How does this work? How can I get another car? I feel so screwed.

My compact car was rear-ended by a truck and pushed into an SUV. It's pretty obviously totaled.

It is a 2003 and I bought it used in 2005. I still owe $11K on it (I have terrible credit and the only way I got this car in the first place was after having an Autotrakk car for a year and making ontime pymts.) It was the first car I've ever had that was reliable and dependable. I planned on keeping it on until it died 110,000 miles from now (it was a Toyota.) Yes I know it sounds like a lot of money for a used car etc, but remember, I had bad credit and couldn't afford to just buy a car outright that wouldn't die in a year. I had a really high interest rate, but at least my car turned on every time and didn't need work every other week.

I see all these askme's about getting a good settlement from the ins co, but my situation sucks.

I have no money for a downpayment and the likelihood of me getting financed is laughable. My only available cosigners would not be able to do so right now, as much as they would like to.

Even so, the KBB value of my car is about $4K. So I'll still have almost twice that left on my loan that would have to be rolled into yet another car. I just don't have $5000 laying around to buy a car outright.

My experience has been that buying the $400 car only results in misery.

I've seen it said several times that insurance is to get you back to where you were before the accident. How on earth is that going to happen? They're not just going to give me money to get a new used car - they'll just give the money to the lien holder - it's a lease.

I don't want something for nothing. I just want my car, not some crappy thing that is not what I worked really hard to get.

This all just happened today and no one can tell me anything until Monday. The at-fault party is not denying anything and he was driving a company truck so I'm dealing with a business insurance not a personal auto policy, which I guess is good.

This is anonymous because I figured this is still in progress as a claim. I'm just freaked out and shook up and in a poor financial state to deal with this at all.
posted by anonymous to Grab Bag (17 answers total)
posted by St. Alia of the Bunnies at 7:32 PM on January 2, 2010

I don't know what good a lawyer would do. Unless you have personal medical injuries that are worth a lot more than $4k, they won't even be interested.
posted by smackfu at 7:47 PM on January 2, 2010

do not make any statement to anyone other than YOUR attorney.

You need an attorney!

Let an attorney handle this for you.

IMNAL you need an attorney....

We will not be able to answer this for you, you need an attorney.

that said, you need an attorney...
posted by HuronBob at 7:50 PM on January 2, 2010

How is it you owe more than the Kelly Blu Book rating for the car?
posted by musofire at 7:54 PM on January 2, 2010

I was involved in an accident where I was rear-ended (while sitting at the red stoplight... couldn't have been less my fault). My car's KBB value was $2000 but we'd paid $3000 because it was in great condition with few miles.

Insurance company wanted to total it, but after much yelling and fighting, my dad was able to get them to cover the cost of repair (~$3000). But here we're talking the difference of $1000, and my family has been with this particular agent/company for years and years.

Just saying that not all is lost. There's still a chance you might not get screwed. What happens next is they'll send an inspector to estimate how much repairing will cost. If $REPAIR > $KBB chances are good they'll declare it totaled. But if they're close... you might be able to work something out.
posted by sbutler at 8:01 PM on January 2, 2010

I'm really sorry this happened to you. I would suggest getting a lawyer. The laws differ from state to state, but in all likelihood, the other guy's insurance company is not going to pay off your entire loan. Not that it helps you now, but there's a whole insurance category called "gap insurance" that's designed to cover the difference between what your car is worth and what you owe. The insurance company will see it more or less like this: right before the accident, you had a car worth $4K and another $7K in debt. The accident "only" changed the car part of that equation, so that's all they're going to pay for. You might be able to convince them to pay for repairs, maybe, but that's a long shot. It sucks, again, I'm really sorry.
posted by donnagirl at 8:18 PM on January 2, 2010

My car was totalled out in an accident several years ago. Unlike you, I owed less than what it was worth but not by much so the other driver's insurance paid the value of the car directly to the leinholder (the bank). I had to fight the insurance company on that though because they were trying to undervalue my car so I did the research myself and was able to quote the state law to them before they relented and paid out. I didn't get a lawyer because I read up on the laws and made lots of phone calls and got lucky.

However, I also got a payment for pain and suffering seperate from the car payment. that was an extra $5000 but I had to use part of that to pay for a Dr visit (whiplash). So you may be able to get money for that without getting a lawyer, depending on the other drivers insurance.

My advice to you is to start asking lots of questions and reading/gathering as much info as you can before necessarily getting a lawyer. Don't agree to ANYTHING and ask for stuff in writing. Don't even say a whole lot to the other insurance...just ask questions. Call the bank who holds your loan and ask them what info they need and what your options are with them. You could consider calling your insurance agent for advice on how to navigate this...mine was nice enough to explain the insurance lingo to me and I didn't have to file a claim. Document any phone calls or discussions you have as well. If you have to get a lawyer, the homework you do ahead of time could save you some billable hours. My state Insurance Commissioner had a hotline I could call for free to get basic advice, which I took advantage of.

I don't understand why you said you have a car loan in one paragraph, and then mention a lease in another paragraph. Those aren't the same thing, at least not in the US.

IANAL, YMMV depending on your state and the insurance companies involved. Good Luck!
posted by MultiFaceted at 8:24 PM on January 2, 2010

The laws will vary by state and situation. The advice to get a lawyer is good, and you should absolutely follow it first thing on Monday.

That said, the insurance will pay to make you whole - that is, the reasonable replacement cost of your car and medical treatment should it be necessary.

The cost of your car is not what you paid for it or owe on it. The difference between what you owe and what it is (deemed) worth is a gap you will (probably) be responsible for. If you got gap insurance as part of your insurance plan or part of the financing, you are in better shape than not.

I would advise you to get a qualified attorney's advice before doing anything else. From the sound of it, you will need better advice than AskMe can give you.

Good luck.
posted by Pogo_Fuzzybutt at 8:29 PM on January 2, 2010

Oh, and one other thing... In some states you (meaning your insurance) will be responsible for the costs of the SUV you rear-ended. Again, you'll want good legal advice to help with this.
posted by Pogo_Fuzzybutt at 8:32 PM on January 2, 2010

You will get paid whatever the insurance company determines the replacement value of the car is. usually this is low end kelly blue book.

So, if they determine that the car is "worth" 4K then you will be paid that amount (or perhaps the title holder will be paid that amount) and you will owe the 7K difference and not have a car. Yes, it sucks. If you are paid the 4K directly then you will be able to in theory buy the exact same used car, and still owe the loan company 11K.

The insurance company does not care how much you owe on the car, but if you are upside down some loans have "gap coverage" that will cover the difference between the value of the car and the amount of the loan. check with whoever you have the loan with.
posted by outsider at 8:46 PM on January 2, 2010

From the original poster:
I did not know there was a difference between car loan and car lease, I thought they both meant the same thing financially. I have a lease thru Toyota Financial.

That's why I am assuming any money will go to them rather than me. The damage to the front end alone will be a few thousand. If they will pay to fix, that would be great. Who pays, my ins or his? I'm assuming his.

Also this is in PA.

How would I even pay for a lawyer? What can they do?

If they don't pay to fix it, can I sue to get money for a replacement car? Otherwise I'm totally out of luck and will probably have to quit my job because it's not on a bus route and no other reliable transport there.

Sorry if I sound desperate but I am.
posted by mathowie at 8:54 PM on January 2, 2010

Dear anonymous person: if you are not aware of the difference between a loan and a lease, then you really need a lawyer, because money matters are obviously not your forte, and this is a pretty significant money matter.

However, also note: you have insurance, yes? Your insurance company deals with issues like this on a daily basis. Contact them, talk to them, have them walk you through everything. Do not talk to the other insurance companies without talking to your insurance company first; since you were rear-ended it is unlikely they will be able to blame you, but a careless or foolish statement on record with the other insurance companies can leave your own insurance company no room to leverage. Also, your insurance company can tell you who the money goes to.

And, if you don't have insurance, you need a lawyer even moreso. If you don't have the funds or expertise to get one, find a friend or relative who does, stat. To answer your "what can a lawyer do" question, the answer is simple: they can navigate the complexities of the situation without making rookie mistakes that jeopardize your claim.
posted by davejay at 9:07 PM on January 2, 2010 [1 favorite]

Yeah...let me amend my previous answer to encourge you strongly to do this:
1. Call your insurance company and ask: I was in this accident and I'm clueless as to what to do next. They can get your started down the right path. Don't tell them you want to file a claim, just ask what you need to do. They may do all the negotiating for you, who knows.

2. Call Toyota Financial and say: The car was in an accident. What are the next steps? They will know what they need to settle up. A lease situation will be handled differently (leasing a car basically means you are "renting" it and have to give it back at the end of the lease period. A loan means you pay all the money you financed and once it's paid off then you own the car 100%). If you don't know the difference between a lease and a loan then there is no telling what kind of paperwork you signed. You should probably reread that contract.

Also keep in mind that the amount you owe on the car includes all of the finance payments and usually isn't the same as the "payoff amount", which is what you use if you pay off the car in one lump sum.

Another thing I thought about: the insurance adjuster inspects the car and decides if it's totalled or not. So really, that needs to happen before you know what the next step is. I'm still gonna say call your insurance company first and see what they say. You might not need a lawyer if they are going to do all the negotiating stuff but you need to ask them first.
posted by MultiFaceted at 10:19 PM on January 2, 2010

I don't know what good a lawyer would do. Unless you have personal medical injuries that are worth a lot more than $4k, they won't even be interested.
posted by smackfu at 7:47 PM on January 2 [+] [!]

Our lawyer did us a LOT of good when a drunken kid ran into my husband and totalled my little VW Golf. It made a real difference in how much settlement we got.
posted by St. Alia of the Bunnies at 10:29 PM on January 2, 2010

Mod note: More from the OP:
Thanks - I realize I stated that poorly - I do know the difference between a lease and a loan, but what I meant was that either way, I don't own the car outright, a bank does, and that I assume that makes a huge difference in how this will be settled.

I am going to see about talking to a lawyer, but I do not have anyone who is really in a financial position to help me.  I am keep track of my pain. I did go to my family doctor after the accident to be checked out. I have some pain in my lower back, neck, shoulder, and wrists but like everyone who's been in a car accident knows, it can be days or weeks until something wrong shows up.

I do have insurance and I have called them.  I was told by them that I was to file the claim directly with the other person's insurance. I have already done so but said nothing more than what was on the police report I was given.  If possible, I will see if my agent or my insurance company can deal entirely with this so I do not, as davejay said, make any rookie mistakes.

My agent will be back in on Monday and I will hear from her then to see what is next.  I am just absolutely floored and depressed at the thought that I may end up carless and still having to pay for a car I no longer have while the guy who caused this didn't even damage his own car, but his company vehicle and isn't facing the consequences I am now facing due to his own carelessness.  

I was under the impression that gap coverage was only for new cars, not used cars.  If that was incorrect, I will be adding it in the future, provided I am able to get a car worth it.

I guess I can only wait to find out what will happen.  At least worrying aloud on AskMe has given me something to do that feels vaguely constructive as I otherwise feel completely helpless and screwed over, even though I did nothing wrong.  *sigh*

The year can only better, right?
posted by mathowie (staff) at 11:18 PM on January 2, 2010

i had this exact same thing happen to me and i ended up having to pay off the loan (for a car i did not have) after the insurance company paid me the blue book value of my car. to add insult to injury when it was time for to start making payments again, i was unemployed and it was during the first bush's recession.

you want a lawyer and you want to be "made whole", which is to be returned to the same state as you were prior to the accident.

i ended up getting screwed by my insurance company, the other person's insurance company as well as my lawyer. you can do better.
posted by elle.jeezy at 11:37 PM on January 2, 2010

Thanks - I realize I stated that poorly - I do know the difference between a lease and a loan, but what I meant was that either way, I don't own the car outright, a bank does, and that I assume that makes a huge difference in how this will be settled.

Well, the car being leased instead of financed changes things.

When you finance a car, you own it - the bank does not. It's your property. It's used as collateral for the loan perhaps, and that has some implications - but it's yours and you are responsible for it.

But when you lease a car, you're just paying to use it - and the lease contract will lay out the terms and conditions of that use. You don't own it and are only responsible for the terms of the lease contract.

I would think this works out to your advantage in this case because you shouldn't be out any money except for any penalties or such that may apply. Those would be smaller than your stated gap, I would expect. Basically, toyota gets their car back and you get out of the lease.

But this is mostly conjecture - you'll want to read the contract terms and talk to a lawyer to know more.
posted by Pogo_Fuzzybutt at 9:59 AM on January 3, 2010

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