If you opt for a cash payment and still owe money on a car loan, the insurance company will generally make the check out to both you and your lender. After your loan has been paid off, any remaining money is yours to keep. However, if the insurance company's payment is less than yo...
you will have to pay the price of the new car plus the $5,000 you owe on the current car. Your monthly payments will be much higher because you're rolling over what you owe on your old car to the loan on your new one.
These are some scenarios when an upside-down loan can mean trouble. Your car is totaled. Following an accident, your insurance agency will pay out the value of your vehicle. If you have an upside-down loan, however, you will still owe that amount, along with any remaining negative equity...
While you need auto insurance with both an auto loan and a lease, the claims process differs for each. If you're in a car accident and your leased car is totaled, you'll file a claim with the insurance company but still owe the dealership the remaining balance on the lease. You can ...
Loan/lease payoff If your car is totaled, this coverage can pay the difference between your car’s actual cash value and the amount you still owe on your loan or lease. Some providers refer to this insurance policy as guaranteed asset protection, known as gap insurance. Custom parts and equ...
If you owe any money on the vehicle’s financing, you will still be held responsible for paying it. You will have to pay off your auto loan out of the settlement you receive for the totaled car. If you financed a new car purchase with no down payment, you may owe more than your ca...
accident loan” and refer to the “advance” as a “loan” because that’s the convention of the industry. There is an interest rate but it’s not technically a loan, it’s an advance on a future settlement so it follows different rules. We, and the industry, still calls it a loan...
the auto insurance company’sassessment of your car’s value. Almost invariably, the estimate comes in lower than you anticipated, and the amount you receive is not enough to purchase an apples-to-apples replacement. Sometimes, it is not even enough to cover what they still owe on the car...
increases the total interest tally, but it means more years of being upside-down – owing more than the car is worth. This becomes a sudden problem if the vehicle is stolen or totaled in an accident and the insurance proceeds are less than the remaining balance on the loan.” -Greg ...
Dock David Treece is a freelance contributor and strategist for U.S. News & World Report, where he focuses on business and personal finance and insurance, including company ratings and reviews. He has worked in finance for more than 18 years and has covered business and personal finance topics...