So You Have a Note and No Car…

 

If you have found yourself in a car accident and the car is totaled, you may not see the immediate importance of paying on the existing car note since the auto insurance is going to pay it off.  You need to make sure that you continue to make payments on the car until you have confirmation the car note is settled by the auto insurance company.

“The auto insurance company will work to complete the payment to pay off the vehicle as quickly as they can.  Until then, in order to avoid any penalties or late fees, you do need to continue to make your normal monthly payment.  The Lender still shows you owe that debt until it is paid off as applied for.  Whether you can drive the vehicle or not isn’t the concern of the lending company”, says Michelle Mosher of Southshore Insurance Professionals.  “If there is enough equity between the value of the vehicle and what you owe (minus the deductible), and you are paying on the car through the litigation phase, there is the possibility that you can be reimbursed for the payments that you have made during that period.”

The point is, if you owe on the vehicle, and the next payment becomes due while the insurance companies are fighting to avoid being the one to shell out the money, protect your credit and continue to pay the note until the insurance company pays it for you.  If, for whatever reason you are unable to pay the note, there is still the possibility to have the derogatory late pays removed, it is just more problematic.  Communicate with your insurance company about the remainder of the note and discuss options like a later reimbursement.

Make the Choice.  Make the Change.  Delta.

2018-09-13T16:21:50+00:00
Go to Top