Anonymous
Anonymous asked in Cars & TransportationInsurance & Registration · 2 months ago

So let me get this straight, if someone totals your financed car in Virginia,  you pretty much end up with nothing unless you're injured?

So you've been financing a late model car, a reckless driver totals it, but you don't have any permanent injuries. at fault insurance pays for your car, which is less than the amount owed.  Gap insurance that you purchased pays the gap.  So your car is paid off but you don't have use of it any more because it's totalled.  Is that what Virginia considers "making you whole"?

Update:

 obviously a person had a car and then didn't,  through no fault of his own

13 Answers

Relevance
  • Anonymous
    2 months ago

    I never dealt with financed cars but how it works is.

    Lets say you put down $1000.00 for a car and signed the contract to pay the rest.($99,000.00) might as well buy the Batmobile. You have actually put in $1000 of YOUR money and you owe the bank $99,000.00.  The JOKER wastes the car completely by driving into  a huge vat of wet cement.  Car is lost. Well it's resale value is worth $0. because it is in dried concrete.  So total loss. Your contract says you own $99,000.00 to the bank.  The bank does not care that you no longer have a working car.  The contract talks about money.

    Obviously you are not going to be able to resell the vehicle to someone else for say $95000.00, you take a bit of a loss as it is no longer new as you drove it. That is called depreciation.(we all take a bit of a hit selling a used car which is why they are cheaper.

    . Anyways GAP is paying the $99,000,00 because it is in the contract. and they get nothing for it. You got off scott free. It cost you only $1000 that you paid out.  Just because the Joker wasted your car for you and he was not caught, then the GAP is paying the $99,000.00

    You walk, a free man just losing $1000. for the gamble.

    If you wanted to be perfectly insulated, then you should have never left "Mommy's tummy"

  • Anonymous
    2 months ago

    That sucks, but that's what happens.  Be happy they've made you whole by paying off your loan, and thank your lucky stars you had the foresight to buy the Gap Insurance.  That would have really sucked, if you owed money on an unusable totaled car.  Just go buy another car and start over.  

  • 2 months ago

    If you had sold the car instead of having it totaled, you would be out more than  you are now after paying off the loan.

    The money you are out is the sunk cost of utilizing a brand new car using borrowed money minus the gap payment.

  • 2 months ago

    As someone who has been in an accident and got my car totaled for no fault of mine, this is pretty much the worst case scenario of car owning. In my mind, car has to be the absolute worst investment of all time. You start losing value as soon as you step off the lot (some 30% or something). You just keep putting money into it, monthly payments, insurance, service, if you are at fault for an accident, and worst case scenario when it gets totaled. Having said that, a 15 year old car that gets the job done is more valuable than what the market will tell me. I have a functioning mode of transportation and then I don’t if someone totals it. It is the most unfair thing about car owning.

  • What do you think of the answers? You can sign in to give your opinion on the answer.
  • F
    Lv 6
    2 months ago

    Always pay the extra on your car insurance for legal assistance. ( I don’t know if you have that in USA, maybe the cost is prohibitive).

    It’s amazing what you can get insurance companies or individuals to pay up rather than go to court .

    Gap insurance is a complete con by the insurance industry but needed because they only pay you trade value for your car. They should pay you what you need to buy a replacement but they don’t. Nice hidden earner for dealers who sell it along with their cars.

  • Anonymous
    2 months ago

    Yes, because the car is still collateral for more borrowed money than it's worth. You're making the BANK whole. You yourself are made whole by being able to walk away from the mess.

  • 2 months ago

    Yes to your first question, in every state.

    No, to your last question.  Making you whole would be if the at fault insurance paid what the car was worth and the GAP insurance paying nothing.  If the GAP insurance pays the gap, then you are coming out better than whole, because you go from owing more than your car was worth to owing nothing.

    Ending up with nothing is an improvement in your situation, because you had less than nothing until the car was totaled.  You owed more than the car was worth.

  • Anonymous
    2 months ago

    That's how it works.

  • 2 months ago

    You understand it all correctly.  Don't finance a car.  When it gets totaled you get all of the money.

  • May
    Lv 6
    2 months ago

    Yes.    You lost nothing, Had you not financed the car you would have the cash in your hands but since you did finance it, it is only right that the lender gets his money back.   You wouldn't want either you or him to suffer the loss would you?

Still have questions? Get answers by asking now.