Crashed Vehicle

[Anonymous]

I crashed my car this weekend and it may be totalled. I believe that the loss will be covered by the insurance and the loan paid off. If not covered totally, it will cover the vast majority of the loan. Will the old loan still appear on my credit report with the history of payments? I only had the car 7 months, and I am debating whether or not to buy another. I have an older vehicle that I can drive for now. I'm trying to buy a home right now and would rather not add the inquiries and new credit to my report. Also, would the payment that I was making not be considered in the DTI for the mortgage anymore, as the loan will be paid?

[Anonymous]

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@Anonymous wrote:

I crashed my car this weekend and it may be totalled. I believe that the loss will be covered by the insurance and the loan paid off. If not covered totally, it will cover the vast majority of the loan. Will the old loan still appear on my credit report with the history of payments? The loan should report as "Paid and Closed" and will continue to be there for up to 10 years.

I only had the car 7 months, and I am debating whether or not to buy another. I have an older vehicle that I can drive for now. I'm trying to buy a home right now and would rather not add the inquiries and new credit to my report. Also, would the payment that I was making not be considered in the DTI for the mortgage anymore, as the loan will be paid? You are correct. This will definitely help your DTI as long as everything reports as it should.

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[Anonymous]

Thank you. That is good news.

[Anonymous]

I am in a nearly idential situation, down to the 7 months of payment and all. When I talked to Santander (my lender) they said it would be reported as paid and closed, as if I had come into a large sum of money and paid the auto loan off. The changes arent visible on my report yet, so I cant confirm 100% that is what has happened.

Yes, it will help your DTI. I am debating that myself. My DTI was going to be fine based upon what I was looking at, but I kind of like the idea of more cash in my pocket. Then again, I dont like the idea of not driving a nice car (I have a really long commute)

[Anonymous]

Wow. I'm with Santander too. That is definitely good to know. Appreciate the input.

[Anonymous]

Hello,

I had a bit of similar experience. I had cosigned for my cousin and he paid of the auto loan in 6 months in full. It is sitting on my CR in good standing as "Paid and Closed"

[Anonymous]

Good to know. My adjuster totalled out the vehicle and I needed to buy another. The payoff is about 1200 shy of the amount owed (including my $1k deductible). I can pay that off in the next month. I'm trying to get financing on a 2011 Hyundai Sonata which I just purchased. Haven't heard for sure yet on the approval, and I think its because the other loan isn't paid yet. Sent the paperwork to pay off the old car this week to Geico.

[Anonymous]

Once the Finance company receives the insurance company pay off and you are down to that roughly $1,200 owed you may also be able to:

purchase a new/used car at a dealership and have them roll your remaining unpaid balance into your new car.

[Anonymous]

I was unsure about that usmc, but yesterday, the dealership I bought the totalled car from offered to make a no money down deal and to cut me a check for the difference owed on the crashed car if there was room in the deal. WhooHoo! I'm just not sure they have a vehicle I want. I have another car that I tried to buy with dealer financing, but its been difficult. I think the high interest rate they quoted me is pricing me out of the deal. I am checking on financing thru a credit union for that one, so if that comes thru, I will be fine. If not, I will consider this offer and choose a vehicle that works. Either way, its much better than where I could have ended up. GAP insurance is now a must for me. 

[Anonymous]

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@Anonymous wrote:

I was unsure about that usmc, but yesterday, the dealership I bought the totalled car from offered to make a no money down deal and to cut me a check for the difference owed on the crashed car if there was room in the deal. WhooHoo! I'm just not sure they have a vehicle I want. I have another car that I tried to buy with dealer financing, but its been difficult. I think the high interest rate they quoted me is pricing me out of the deal. I am checking on financing thru a credit union for that one, so if that comes thru, I will be fine. If not, I will consider this offer and choose a vehicle that works. Either way, its much better than where I could have ended up. GAP insurance is now a must for me. 

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Be aware a high interest rate at no money down with them cutting you off a pay off check could easily be a better rate with money down.