Title Loans on a Totaled Car No one likes to think about getting into a car accident. However, accidents are something that many people have to go through no matter how safe they drive and follow the laws of the road. Annually, only less than one percent of drivers in America get in car accidents […]
Title Loans on a Totaled Car
No one likes to think about getting into a car accident. However, accidents are something that many people have to go through no matter how safe they drive and follow the laws of the road. Annually, only less than one percent of drivers in America get in car accidents that end up being fatal. For non-injury accidents, the number is below five percent. Whether an accident is truly an accident or is someone’s fault, it can be a costly event to get through. Matters can be made even more difficult when you have title loans on a totaled car involved in the car accident.
Title loans are short-term loans which you can apply for using your car’s title as collateral to secure it. These are high-interest personal loans. If you fall behind on your payments to the auto title loan lender, they may use the title of your car to repossess it. In most cases, the loans have around 30 day terms. They can be applied for online or at a local title loan lender’s office. You can easily get approved for a title loan if you have bad credit because most lenders don’t require a credit check. To get a title loan online, you need to have a source of income and a lien-free title. Lien-free titles are ones that have no loans out for them and no other title loans attached to them.
Insurance Payments After A Car Accident
Many insurance companies consider your car to be a total loss if the damage is more than eighty-percent of the total car’s value. When the damage is this much, most insurance companies will not pay to get the car fixed. Instead, they will just pay you the estimated value of your vehicle and you will have to buy a new one. This is not new title loan news and has happened for years.
What To Do If You Have Totaled Your Car And Have A Title Loan On It
If you have a title loan out and used the car which was totaled as collateral for it, you will still have to pay the loan back. When you signed the title loan agreement, you were given a cash loan by using your car as collateral and letting the lender put a lien on the vehicle. As part of a vehicle title loan, borrowers are required to have liability insurance in their car insurance policies. This type of insurance is what protects both lenders and the borrowers in the event that the car is in an accident and damaged.
If the vehicle that is in the accident gets too damaged and the insurance company calls it a total loss, then the liability insurance will help to pay off the title loan. However, if the lender and the borrower didn’t use liability insurance, the borrower is still going to be held responsible for paying back the title loan in full.
If there happens to be a lapse in your liability insurance at the time that your vehicle gets total in a car accident, the borrower is still going to have to pay the title loan back as well. When something like this happens, borrowers should try and negotiate with the auto title loan lender and explain the situation. Car accidents are a very common occurrence. Having your car get totaled is not as common. Reputable lenders understand that sometimes bad things happen and they might work with the borrowers in order to work out a new repayment plan.
After a vehicle has been declared totaled by a car insurance company, there will be no collateral left in the vehicle for the title loan. Because of this, the lender might be willing the change the type of financing for the borrower from a title loan to a personal loan. Personal loans are different from title loans and can come with different terms and conditions. This is especially true if the borrower has no other collateral to use.
If the borrower has another vehicle in which they could use as collateral for the title loan financing or the personal loan financing, the lender may be able to simply apply your outstanding title loan balance to the new loan. The new financing might be capped out, however, depending on the amount of equity the other vehicle has.
If you have a car accident and your car gets totaled, contact the title loan lender as soon as possible to explain what happened. Many lenders will offer borrowers the ability to take three months to catch up on their payments if they fall behind. If the borrower gets injured badly during the accident, it may be difficult to keep up with their title loan payments.
What Happens When You Don’t Pay Title Loans On A Totaled Car
If your car accident results in your car being totaled and you still have an outstanding loan balance on your title loan, you will be required to pay it back. If you do not pay it back in full, you could get in hot water with the lender. Since they cannot repossess your totaled car, they might be able to turn your loan over to a collection agency to help recoup their losses.
Getting Title Loans On A Salvage Car
Not all cars have a life without accidents or needing major repairs. However, some get in bad accidents and are able to get rebuilt. When a car is deemed a salvage vehicle, it will need to have a new rebuilt title put on it. Rebuilt title cars that have been salvaged can sometimes be a scary thing to purchase. In some cases, though, a salvaged car that has been rebuilt will get repairs done as close to factory standards as possible.
Should I Consider A Rebuilt Title Car?
There is no reason not to think about purchasing a rebuilt title car. They are oftentimes much more affordable than cars with clean titles. When you do consider one, however, it is essential to get it checked out by a competent mechanic who can fully assess if all of the damages were repaired properly.
Can I Get A Title Loan On A Salvage Car?
Many people do not think they can get a rebuilt title loan on their salvage car. However, you are able to get one on your salvage car the same as you would with a car that has a clean title on it. Your salvaged car may not have the best resell value, but you were able to buy it for less and can get a title loan on it when you need one.