Totaled Vehicle! :(

[iamdetermined]

Hi everyone!

I've been strolling on a rocky road lately.

 I got my first CC denial in quite a while...lol...then I got a CLI woohoo!...now my car is totaled   *Sighhhh* 

My car was involved in an accident a few days ago (I wasn't driving/in the car & driver is fine) and USAA is totaling out my car. 

I knew better, but June 2017 I agreed to an overpriced Wells Fargo loan. Dumb, I know. What's done is done. Definitely a lesson learned, and I can't afford to make that mistake again. 

USAA is offering ~$7500 less than what I owe on the WF loan; I'm aware that I will owe the balance. Do they negotiate?

I have it in emergency savings, and will be receiving my tax refund soon (that was going to pay down debt and save ),

I also have a 401k as a last resort.  

USAA wants possession of the vehicle, but if I retain it will it be worth it? (Common sense tells me yes, keep it because I'm still going to owe the loan regardless. If I give up the car, I have nothing but a large balance owed  <-- INPUT PLEASE!) But what if they don't allow me to keep it? Do I have the right to dispute for ownership?

I'm going to need a new reliable vehicle, and didn't plan to outright purchase a vehicle. That may have to change if I can't get a new (reasonable) loan.

Is it possible to have the Wells Fargo balance lumped into a new vehicle loan? If so, how would I go about doing it? 

Any input (lenders?)  on my next best move is appreciated! My Fico 8's are high 600's-low 700's, income ~$70k+, 1 derog.

I'm in need of a hug and larger cup for this wine. There goes part of my dream home down payment   

Another big credit lesson learned! 

[Anonymous]

Question, USAA is offering 7500 less then total owed which leaves how much outstanding? And who are they offering it to? You or Wells Fargo?  Trying to understand data before I chime in..

[iamdetermined]

USAA is my insurance carrier, and they're offering me $12,500.

There's $20k balance left on my WF loan, which leaves $7500 balance that I will owe to WF.

Thanks for the reply!

[Anonymous]

I don't have any advice on how to handle USAA vs WF, but I will say whoever get your next car loan through, see if they have GAP insurance on the loan. It really is a life saver, and doesn't cost that much more monthly. I have my car loan through my CU Visions FCU, and I have GAP on it. If my car is ever totalled, they forgive the difference between the insurance payout and what is left on the loan. There is more to it than that (for example, if I die the car is considered paid off and my family gets to keep it) but I mainly got it for this exact situation.

[Anonymous]

Yeah that’s a tough one without gap coverage. There are some finance companies that would allow you to roll the 7500 into a new auto loan I have done something similar but because the amount I asked to include could not be secured by the vehicle my income and credit profile played a major part in getting that approved. Is the car truly totaled? I ask because progressive totaled my car just because they felt it cost more to fix then it was worth however I disagreed so I paid my deductible let them keep 1000.00 of my settlement offer to buy the car back pocketed the rest got the car fixed for 800.00 and kept it moving making a gain on the deal.

so I would say analyze if it’s beyond repair, how much would it cost, how much they will deduct for you to keep the car because if you can keep it affordably get it fixed use the rest to payoff wf loan and you could end up with a car you still can utilize, a big chunk of your loan paid then just continue to make payments no harm no foul.

[Remember0]

Oof first off I'm sorry you are going through this. Now let's try to unpack.

When you say totaled I assume you mean you can't drive it anymore. Not something silly like the bumper of your VW crumpled and because VW bumpers are too expensive the insurance co totaled your car. If it's undrivable I don't see any benefit to holding onto the car...typically if they let you do that USAA will just subtract the salvage value and thus give you even less.

Now before you agree to a number with USAA did you try to negotiate? Best practice is to go find different comparable vehicles for sale at local dealers ideally for more than what USAA offered, go to your adjuster and tell him you don't consider his offer fair but do find an offer say $1k higher fair. You won't get 7.5k this way but on my last one like this I got 700 more than what they initially offered.

With WF what is your interest rate? I'm not the expert on if you can negotiate without destroying your credit. Certainly doesn't hurt to see if they will lower APR and make remaining payments maybe. Hopefully someone else has better advice for you on this front.

I'll reply later on new car.

[FlaDude]

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@iamdetermined wrote:

USAA wants possession of the vehicle, but if I retain it will it be worth it? (Common sense tells me yes, keep it because I'm still going to owe the loan regardless. If I give up the car, I have nothing but a large balance owed  <-- INPUT PLEASE!) But what if they don't allow me to keep it? Do I have the right to dispute for ownership?

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When they total the car they take ownership, there is no dispute. Even totalled the car has some salvage value, and they will sell it to defray some of what they pay out. You can find out the salvage value and offer to pay that amount. A friend of mine did that and had the car repaired for less than the insurance payout and was happy with the result.

[MitchDeerfield]

Are they giving you a fair settlement for your insured car?  USAA will try to lowball you with an insufficient  offer, I have had experience with them before.  I disputed it and got a couple of thousand dollars more from them.   Whose fault was the accident?

[Save-n-Invest]

OP, I'm sorry for your totalled vehicle and the new challenge this presents. Bummer. This is not my area of expertise. I'm just wondering if you keep the totalled vehicle will it have a branded title? If so would that pose a difficulty with insurance and/or the loan? People who are much better versed in this will give good info. I'm just sort of wondering if there are pitfalls. 

Wish you the smoothest and least costly solution to this. Sorry you have to deal with this. 

[Anonymous]

Never agree to the first offer from insurance, do your research on the car's value, KBB/NADA/Black Book values, as well as similar vehicles for sale in the local area. Negotiate for a higher settlement from USAA.

Secondly, WF has little to no reason to negotiate a smaller payment for the deficient balance, they will however, probably work with you in setting up a payment arrangment to payoff the deficient balance (usually at a lower interest rate/payment than your original note.)

Insurance has the right to the vehicle as they are the one's paying a settlement on it to Well's Fargo, you have the right to repurchase the vehicle for salvage value but unless I knew what the extent of the damage is, I wouldn't be able to guide you in a direction. If you were to repurchase the vehicle basically they decide a salvage value and deduct that from the settlement amount sent to Well's Fargo and you would be responsible to pay repairs out of pocket to get the vehicle driveable, as well as go through the process to turn the salvaged title into a rebuilt title.

One option might be to go car shopping, find a vehicle you like, and explain the situation with Well's Fargo to the dealer and have them include the deficient payoff balance on the loan, but offset it by putting a significant down payment in order to alleviate having a VERY upside down loan. And purchase GAP this go around as it truely is a life saver.