Car loan more than the car value

[amclaughlin42]

Our car was hit by a massive hail storm on Easter Sunday. We were hit with hail that was larger than quarters. We have dozens of dents all over our car. We hoped to be able to trade it in a year or so. About a month and half prior to this, we were in a hit and run and had to have our door replaced on passenger side, as well as the wheel well. So we already have one accident on their and now weather damage. Our car has seriously gone down in value since we've purchased we've been paying 22% interest on our car loan for the past 13 months! We can't get it refi because our LTV is too high. If its considered totaled and we owe money to the lender still what can we do? Can I put it on another car loan? We couldn't really afford a down payment maybe only $500? I am coming in with a bonus soon so possibly $1K down payment but I may not get my bonus till May and this is not something that can wait this long. We will NOT be able to pay the extra money owed right away. 

[Skye12329]

If you had full coverage insurance, that should help some if the car is totalled because the insurance company will pay the worth of the car. The other thing i ask is did you get GAP insurance? If so GAP will pay the remainder of the loan if its totalled.

[StartingOver10]

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@amclaughlin42 wrote:

Our car was hit by a massive hail storm on Easter Sunday. We were hit with hail that was larger than quarters. We have dozens of dents all over our car. We hoped to be able to trade it in a year or so. About a month and half prior to this, we were in a hit and run and had to have our door replaced on passenger side, as well as the wheel well. So we already have one accident on their and now weather damage. Our car has seriously gone down in value since we've purchased we've been paying 22% interest on our car loan for the past 13 months! We can't get it refi because our LTV is too high. If its considered totaled and we owe money to the lender still what can we do? Can I put it on another car loan? We couldn't really afford a down payment maybe only $500? I am coming in with a bonus soon so possibly $1K down payment but I may not get my bonus till May and this is not something that can wait this long. We will NOT be able to pay the extra money owed right away. 

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How much do you owe?

What is the trade value?

What will Carmax pay for it?

One of the problems I see is this:  even if you are able to trade it, you kill the value of the next vehicle by being so far upside down. That negative equity doesn't just disappear. Do you have insurance so you can repair this vehicle?

[amclaughlin42]

No we did not get gap insurance! It was never even offereded I had no idea what it was until after this incident

[amclaughlin42]

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@StartingOver10 wrote:

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@amclaughlin42 wrote:

Our car was hit by a massive hail storm on Easter Sunday. We were hit with hail that was larger than quarters. We have dozens of dents all over our car. We hoped to be able to trade it in a year or so. About a month and half prior to this, we were in a hit and run and had to have our door replaced on passenger side, as well as the wheel well. So we already have one accident on their and now weather damage. Our car has seriously gone down in value since we've purchased we've been paying 22% interest on our car loan for the past 13 months! We can't get it refi because our LTV is too high. If its considered totaled and we owe money to the lender still what can we do? Can I put it on another car loan? We couldn't really afford a down payment maybe only $500? I am coming in with a bonus soon so possibly $1K down payment but I may not get my bonus till May and this is not something that can wait this long. We will NOT be able to pay the extra money owed right away. 

---

How much do you owe?

What is the trade value?

What will Carmax pay for it?

One of the problems I see is this:  even if you are able to trade it, you kill the value of the next vehicle by being so far upside down. That negative equity doesn't just disappear. Do you have insurance so you can repair this vehicle?

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We owe $17000

Trade in Value is 8100

Private Party Cash Value is 10100(Not really sure what insurance companies go off of)

I did notcheck carmax but those are the number I got from Kelley Blue Book. 

What we CAN do is submit to our insurance a larger number, take it some where cheaper, and keep the rest for a down payment towards after the car is repaired, one place quoted it as almost $6K worth of repair where some other places were $2500. So we could profit enough for a bit of down payment, of course we would pay our $500 deductible. I am getting a bonus at work within the next month so that can also be a down payment. I understand we would be upside down, thats going to happen either way. My credit score has drastically changed since getting my car. I went from not having credit, to having a credit score of 700 in just over a year. 

[Pway]

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@amclaughlin42 wrote:

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@StartingOver10 wrote:

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@amclaughlin42 wrote:

Our car was hit by a massive hail storm on Easter Sunday. We were hit with hail that was larger than quarters. We have dozens of dents all over our car. We hoped to be able to trade it in a year or so. About a month and half prior to this, we were in a hit and run and had to have our door replaced on passenger side, as well as the wheel well. So we already have one accident on their and now weather damage. Our car has seriously gone down in value since we've purchased we've been paying 22% interest on our car loan for the past 13 months! We can't get it refi because our LTV is too high. If its considered totaled and we owe money to the lender still what can we do? Can I put it on another car loan? We couldn't really afford a down payment maybe only $500? I am coming in with a bonus soon so possibly $1K down payment but I may not get my bonus till May and this is not something that can wait this long. We will NOT be able to pay the extra money owed right away. 

---

How much do you owe?

What is the trade value?

What will Carmax pay for it?

One of the problems I see is this:  even if you are able to trade it, you kill the value of the next vehicle by being so far upside down. That negative equity doesn't just disappear. Do you have insurance so you can repair this vehicle?

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We owe $17000

Trade in Value is 8100

Private Party Cash Value is 10100(Not really sure what insurance companies go off of)

I did notcheck carmax but those are the number I got from Kelley Blue Book. 

*What we CAN do is submit to our insurance a larger number, take it some where cheaper, and keep the rest for a down payment towards after the car is repaired, one place quoted it as almost $6K worth of repair where some other places were $2500. So we could profit enough for a bit of down payment, of course we would pay our $500 deductible. I am getting a bonus at work within the next month so that can also be a down payment. I understand we would be upside down, thats going to happen either way. My credit score has drastically changed since getting my car. I went from not having credit, to having a credit score of 700 in just over a year. 

*That statement you have made sound like fraud to me and believe you me the insurance company will know.  I would not suggest that at all.  In the other case they will send an adjuster out to assess the damage of the vehicle.

[amclaughlin42]

I don't think thats considered fraud, my mother in law suggested it! My mother in law is not one to suggest something illegal, My wifes ex husband just commited idenity theft, he hasn't been charged yet. So my MIL would not suggest this other wise, its just shopping around at different places. Its not fraud

[Skye12329]

To falsify information to the insurance company would be fraud. Now if you went to a more expensive auto repair place, sent them the quota and got it repaired there wouldn't be fraud, if you got it repaired at that autp shop. But to get a quote get a check and go somewhere cheaper would be fraud, since its deliberately lying to the insurance company. 

Usually insurance companies will direct you to a place of their choosing or whom they might work with. Some will send out an adjuster of their own to determine if the car is totalled or not. If the repairs are more than the worth of the car it would be considered totalled. Which if you have full coverage, they will send you a check for the worth of the car. In this case between 8-10k (usually kbb value). You can then choose to take that check and use it for the lien on the car or another down payment, but you would still have to pay the lien off.

[sccredit]

What OP is suggesting is not fraud.  If OP wanted they could get the high quote, insurance will cut them a check and if they never get it repaired it still wouldn't be fraud.  However, the insurance company would exclude hail damage from the policy as the car would already have it (since they never got it repaired).  Whether it is morally wrong is between OP and his conscience.  

[redbeard]

The somewhat good news for you is that based on the value of the car vs the costs of the repairs, your car probably will not be totalled.  The reason this is good is you are to far upside down that the insurance settlement wouldn't come close to the debt, so you would have  a huge balance to deal with still.

At the numbers you have vs your balance, GAP insurance wouldn't cover it either.  It would have helped, but wouldn't cover the full amount.  I suspect this is why they didn't offer it, just do to the amount of negative equity.  Plus, with the cost of the GAP insurance, you would be further in the hole.

Mother in law aside and other comments aside, the way the insurance company will pay the claim is they will evaluate the cost to repair the damage, subtract your deductible and write a check.  If you are having the work done at a body shop, they will make the check out to you and the body shop.  If you just want a check for the damage (and its not fraud to do so), they will make the check out to you and the lender you have.  They will not make the check out to you alone, since you have a lienholder who wants the car repaired.

Its hard to come out ahead on these deals.  The goal is to get your car fixed, not to put a lot of money in your pocket.

Dan