Car Accidents Happen with a Car Title Loan; Now What?
For various reasons, a person make take out an Auto Title Loan, but while the lien holder still has control over the title, you may ask yourself, “what if I get into an accident while I have a title loan?”
Getting behind the wheel of a motor vehicle is a risk that each and every one of us takes every day of our lives. Whether we’re on our way to work, the grocery, craving a fast-food treat or to carouse a store for the latest flat-screen television, men and women’s preferred mode of transportation is their private vehicle—usually a car. And, while we may not like to think about the negatives aspects of engaging the rules of the road, the thought(s) can’t help but occupy space in the back of one’s mind. No matter how safe and responsible a driver is, there’s no telling what factors could possibly contribute to a traffic accident, no matter how unlikely one may be.
A car accident can be a terrifying experience, as well as a tricky one to clean-up. Above all else, a person’s life is more important than anything, but while only about 1 percent of American drivers end up being involved in a fatal car accident and less than 5 percent in non-injury sustaining crashes annually, an accident can cause a lot of headaches and could possibly lead to long-term financial damage; long-term financial damage could become increasingly more problematic in the unlikely event that a driver still has a lien holder on the vehicle’s title.
So, on the off-chance that you’ve been in an accident, what are the next steps to regroup financially?
What Not to Do if I Get into a Car Accident While I Have a Car Title Loan?
Car accidents are always unexpected, and for this reason title loan borrowers may be thrown once again into financial instability. But borrowers must still continue to make their monthly payments.
If a borrower fails to continue making payments on their vehicle, they may fall into default and their vehicle may be repossessed. If no effort is made to retrieve the vehicle, then it may be sold. If the car has been damaged due to an accident, then the lender may not collect enough money from the auction to cover the remaining value of the loan. If money is still owed, then the borrower will still be held responsible for paying the remaining balance.
But don’t worry. We would much rather help our customers get things squared away. So stay in contact with us, and keep us in the loop.
First, Let’s Talk About How Car Title Loans Work
One of the key factors in finding out how much you can borrow for your car title loan is the condition of your vehicle. Your car title is being used as collateral for the title loan. Having a car title with a qualifying vehicle as your collateral is what makes the loan a secure loan.
When applying for a car title loan, you will need
- A car title to a qualifying car in your name,
- A government-issued ID (driver’s license, state ID, etc.)
- Proof of income (such as paystubs, invoices or bank account statements) to show your ability to repay the loan
- Proof of residence (such as a recent utility bill)
When the collateral is totaled, this changes the terms of the title loan. You may no longer have a qualifying car. You need to make sure you notify any kind of vehicle accident. You also need to remember to continue to make your loan payments, until your claim is settled, either by your insurance company or the other insurance company, if multiple vehicles were involved. You must remember that you are still responsible for making your payments, on time, even when your case is being investigated by insurance companies.
Your Car Insurance Coverage
Before you start panicking, try and remember what your car insurance coverage entails; insurance coverage will be a substantial deciding factor in determining what will happen in your accident case, and the future payments of your loan.
There are dozens of different agencies with dozens of different plans per customer and vehicle. While this information may not completely help you after an accident, it could help you rethink your financial planning for the future, in-case any similar situation arises.
When dealing with an insurance company, it’s always a good idea to know the value of your vehicle.
- A good place to do this would be Kelley Blue Book: you can input all the necessary information to determine what your car is worth, especially if you end up being involved in an accident.
- Knowing your vehicle’s worth will better prepare you to deal with not only your insurance company, but the offers to settle with the other driver’s company.
- Generally, insurance adjusters will try to not let their companies give away money for free; some will decide your vehicle is worth less than what you found on Blue Book, and offer you the lower settlement.
If you only have the liability coverage, you may have to deal with the other insurance agency yourself. When doing so, remain cool and collected, as it is their job to ask you questions, some of which you will get frustrated with; empty threats that promise “you’ll be hearing from my lawyer” will only delay your reimbursement by weeks, and even months.
Liability insurance covers the cost of damage to other vehicles in a car accident, and the medical care for injured individuals. In South Carolina, drivers must have the following minimum liability coverage:
- Up to $25,000 for bodily injury or death per individual
- Up to $50,000 for bodily injury or death per accident
- Up to $25,000 for property damage
Full coverage insurance means the driver is insured for any accidents. This means the cost of damage to the other vehicle, as well as the drivers own, is covered. Full coverage is comprised of collision and comprehensive insurance.
Collision insurance refers to accidents involving another vehicle, hitting an object, or driving off the side of the road. Comprehensive insurance covers all other non-driving accidents such as weather damage. Having full coverage on a vehicle is ideal, especially when the remainder of a title loan must still be paid back. But no matter the insurance type, here is how the process will likely unfold.
If you still owed money on your original auto title loan, you will keep making payments on the loan even if the car was totaled. Once things get squared away a tad, the settlement check would be absorbed and applied to your loan, but you’re still be expected to pay off the balance. Your car acts as collateral for the loan and repayment remains an obligation, even if the collateral no longer exists. In many cases, title loans require the existence of full coverage insurance to ensure funds are made available for repayment in case a wreck occurs.
While accidents happen, and they’re terrible ripples that disrupt the flow in the steam of life, we have to adjust and keep a clear and concise head, and look at the bigger picture and be thankful that while our wallet and bank account, our life and physical being was not.
Car Accident Settlements
After a car accident, a driver must file a claim with the insurer. Investigations will be performed in an effort to confirm accident claims and discover fault. After the investigation, the insurance company will make a settlement offer.
The amount of time it takes to reach a settlement between the drivers involved in an accident and the insurance companies can vary. There may be several rounds of negotiations due to counteroffers and arguments.
Once things get squared away a tad, the settlement check would be absorbed and applied to your loan, but you’re still be expected to pay off the balance. Your car acts as collateral for the loan and repayment remains an obligation, even if the collateral no longer exists. In many cases, title loans require the existence of full coverage insurance to ensure funds are made available for repayment in case a wreck occurs.
Going through a settlement process can be daunting and time consuming. But if a driver knows the value of their vehicle, then they can be better prepared to dispute claims that their vehicle isn’t worth that much and revoke a low settlement deal.
While all of this is occurring unfortunately, a borrower will still be held responsible for making monthly installments on their loan. Car title loans are an obligation that must be met. But not to worry.
What Do Title Loan Companies Expect if Your Car is Totaled and You Have a Title Loan?
We always want you to feel comfortable with everything we do for you. We try to be transparent in what we expect in terms of your title loan expectations, so we will work with you with any questions you may have. The best way to get answers is to give us a call at 1-855-422-7412 for more information on title loans. This is only to be used as a guide for this kind of situation, but feel free to call us and we can walk you through the process so that you understand what expectations are.
How You Can Protect Yourself if Car Accidents Happen with a Car Title Loan
It would be easy to say, just be a safe driver, because we know no matter how safe you play it, you can never hold into account how another driver will drive. Rear end collisions and cross-traffic or side-impact accidents are some of the most common types of accidents and their most common factor is that there are two or more drivers involved.
Even in situations where it’s your fault, due to inclement weather, such as rain, you should still make sure you have the correct car insurance coverage. There may also be state laws in accordance that may regulate how the insurance covers the vehicle. The borrower is always responsible for repayment, in cases where there is no liability or full coverage insurance. By making sure you have the right coverage for the right state and situation, you can avoid having to pay more out of pocket than you would have had you been prepared. You can inquire about such coverage with your insurance or during the application process.
We ensure customers remain our top priority, and that means providing superior customer service and consistent dependability. To see what we may be able to do for you, contact us at 1-855-422-7412.