As painful as it is, you’re legally obligated to make your monthly loan payments to the lender until the loan is paid off. The fact that your car is a total loss doesn’t change your loan repayment terms. Your lender still has the right to full repayment of the loan, even though you can no longer drive your car.
What to do when your car is broken and you still owe money?
When your car breaks down and you still owe money to the bank for the vehicle, you have a few options:
- Roll it over. You can add the debt from your old car to a new car loan and pay both cars off simultaneously.
- Pay off the loan.
- Declare bankruptcy.
Does a totaled car hurt your credit?
How Can a Totaled Car Affect Your Credit Scores? Car accidents, even those that result in a financed car being totaled, won’t directly impact your credit scores. Credit scores are based solely on the information in your credit report and don’t include things like your driving record or previous insurance claims.
What happens if your car blows up and you still owe money on?
“If your engine blows up on a financed car, you’re still on the hook for the payment. Unfortunately, your car insurance won’t pay for the damages either, as even full-coverage policies won’t cover this.
Can you keep a financed car if totaled? – Related Questions
Will a dealership buy my car if I still owe?
What happens if I still owe money on my trade in car? It’s important that you know the pay-off amount – how much you still owe – and the trade value of the car – how much the dealer is willing to offer you. A dealer will then pay off your old loan and give you a credit for the value of your trade vehicle.
How does gap insurance work?
GAP Insurance is a type of insurance policy attached to your car loan that will cover you in the event of total loss. It will essentially pay-out the difference between what your comprehensive car insurer pays and the remaining finance amount in the event of total loss.
Can I claim on my car insurance if my engine blows up?
Typically, car insurance does not cover engine failure, even if you have full coverage. The exception is if the mechanical problem or blown engine can be directly linked to a covered claim.
What if I buy a car and the engine blows?
While a car with a blown engine might now be worth much to you – or anybody else for that matter – most car dealerships will accept it in a trade. With this, you can trade in your car to help pay for a new one. The car dealership will then take your car and either sell it or use it for pieces.
Does gap insurance cover if your engine blows?
The short answer is no, gap insurance does not pay for a mechanical breakdown like a seized engine or broken transmission. Gap insurance pays the difference between your car’s value and what you owe on it if the vehicle is totaled in a crash or stolen.
Will my warranty cover a blown engine?
If you have a new car and your engine blows up – there’s almost no scenario where your engine won’t be 100% covered by the manufacturer warranty. The second type of warranty is a post-purchase extended warranty that covers your car after the initial manufacturer’s bumper to bumper warranty expires.
How much does it cost to replace an engine?
The cost to replace a car engine is between $3,000 and $5,000 for most cars. It sounds like the quote you were given was right on the money, unfortunately. Very complex engines can cost up to $6,000 to replace. However, most four-cylinder vehicles need about $4,000 to complete an engine replacement.
How long does it take to replace an engine under warranty?
The time it takes to pull and replace an engine is 8-15 hours depending on the car’s model, age, the skill of the mechanic, and type of engine work (replacement vs. repair). Some cars are notorious for having harder than usual engines to replace or repair. Ask your mechanic for a quote and compare options.
What is not covered by comprehensive car insurance?
Comprehensive car insurance covers your car, plus damage you cause to other people’s cars or property. It does not cover your liability to pay compensation if you cause injury to another person.
What can you claim on comprehensive insurance?
Comprehensive insurance coverage is defined as an optional coverage that protects against damage to your vehicle caused by non-collision events that are outside of your control. This includes theft, vandalism, glass and windshield damage, fire, accidents with animals, weather, or other acts of nature.
What is full comprehensive insurance?
Comprehensive insurance, like the name suggests, is an insurance option that covers your car against accidents, fire, theft and other insured events, as well as claims from third parties, windscreen and glass repairs.
Can you claim tires on insurance?
If you have comprehensive and collision car insurance coverage, then you’re typically covered for tire damage if it’s the result of an accident or something unexpected, such as theft or vandalism.