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Car totaled. When to start shopping for a new loan?

New Member

Car totaled. When to start shopping for a new loan?

So last Friday an uninsured motorist with an unregistered vehicle ran a red light at an intersection and hit me. I got the call yesteday afernoon from the local collision shop that my (USAA) insurance company uses that the car is totaled and he is submitting the value at $19,300. My payoff on the car will be about $11,500. My adjuster told me the ongest part of the process was waiting for adjuster to determine the loss and after that it the process of paying off the lein holder and tranfering the remaing funds to my account would happen quickly becuase they use FedEx etc. I was also told once my car was "officially" totaled I would have 7 days in my rental car. I have not heard the official word from USAA yet on the total loss and the value, just from the local adjuster. My question is when do I start the process of looking for financing for my next car?  For several reasons (rleated to relaibilty and safety features)  we have decided to suck it up and spend the money on a 2016 Odyssey. Our credit rating and cash on hand is much better this time than when we bought our car in 2012 so I want to go into the dealer armed with a competitve loan offer. We have a 694 Fico Auto 8 score and have an annual income of $212,000. Not counting the loan on the totaled 2012 we have an auto loan for my husband's truck for about $20k. I know I can get a letter from USAA documenting the loss and the intent to pay off the 2012 so can I start applying at my local bank, credit untion and USAA now or should I wait until the entire payoff process has ended? Sorry for the long question. This is my first tiem dealing with this kinf od situtaion.

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Frequent Contributor

Re: Car totaled. When to start shopping for a new loan?

You shouldn't have any trouble getting an auto loan with a (projected) cash down payment and no trade in, with your income level and scores.


If you are planning to work with your credit union, you can tell your loan officer exactly what is happening - waiting on insurance payoff, cash surplus is going to down payment on the new one, etc - and their underwriters should take that into consideration, if you have an ongoing relationship with them already anyway.


If you are concerned that the "extra" loan appearing on your credit (at least until the lender on the 2012 reports it closed/paid, which can take some time after the actual payoff happens) will adversely affect a new loan deal, by artifically raising your DTI or whatever, you could always "buy" a week or two by taking over payment for the rental, until the smoke clears, check from insurance is in hand, etc.  You can rent a small car in most markets for less than $150 a week.

Message 2 of 3
Senior Contributor

Re: Car totaled. When to start shopping for a new loan?

Don't know about USAA, but most lenders will pre-qualify you and then you have 4 to 6 weeks to actually purchase the vehicle. I have used DCU twice to do this, in December 2014 to buy a 2013 "used" vehicle for the wife and in February this year to buy a new vehicle to replace mine. Very easy process, just put in what you expect to borrow - I put in $30k each time and paid $17k for the used - financed $28900 on the new one (listed just over $40k, added cash and trade). 

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