Yvette asked in Business & FinanceCredit · 1 month ago

Charge off on auto loan?

Hi, so I paid my car payments on time. The car was totaled. The insurance and gap took over but they took a while to pay the loan off. The loan reported the loan as charge off to my credit bureaus because the gap and car insurance took a while to pay them. Why should it reflect on my.credit as a charge off if the insurance didn't do their job and pay them right away and reflect on my credit like if it was my fault like if I was making the late payments??

9 Answers

  • 1 week ago

    Go back and skim your loan contract. No where does it say, "You aren't required to form your loan payments on time if you total your car."

  • 1 month ago

    You're still responsible for the monthly payment per the terms of the contract when your vehicle is totaled until the insurance and gap pay whatever they're going to pay. If there is still a balance left over after they do pay, then you are still responsible for anything remaining. Also, if you ever deferred any payments to the end of the note it is likely that gap coverage did not pay those payments. They only cover the payments that should have been remaining after the date of the loss, not before.

  • RICK
    Lv 7
    1 month ago

    Because it's still your responsibility  to make sure it was done in a timely  manner

  • 1 month ago

    They didn't get into the car crash - you did.  If you continued to make your car payments, like you said, then it could not have happened.  You signed a contract - you were responsible for those payments, regardless of everything else.  It properly went on your credit.  You should have made the payments "as agreed", per your contract and then if some money was owed to you later, you would have got that money back.

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  • 1 month ago

    Because you are the person who is responsible for making sure it is paid on time.  That is not their job.  It is your job, and only your job, and no one else's job.

    They did do their job, which was only to pay eventually, not to make sure it was on time, which is your job.

    They make it like it is your fault because it is your fault.  You are required to keep making the car payments yourself, until the insurance pays.  You don't get to stop paying merely because there is an accident.

  • Anonymous
    1 month ago

    Go back and read your loan contract.   No where does it say, "You are not required to make your loan payments on time if you total your car."

    You didn't pay as agreed and therefore it IS your fault.


  • Anonymous
    1 month ago

    You should have been on the insurance to pay long before they did. This was your responsibility. Not one you can disclaim.

  • 1 month ago

    You are very fortunate that gap paid.

    Usually you have to continuing pay your payments while you are waiting for the insurance company to make their payout for gap to cover the remaining car loan.

    Charge off means that the car was not paid for.

    You need to confirm with the lender the car was eventually paid for. 

    If this is the case, the car was not "charged off".

    If the car has now been paid, it should change to "paid as agreed". 

  • 1 month ago

    Did your credit score decrease?  My mother had a charge off on a medical bill from a car slamming into here at a red light that was paid 2 years late .  Not sure if it was interpreted as negative, previously it was listed as non payment on credit report.

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