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.
Accidents Happen; Now What?
So, on the off-chance that you’ve been in an accident, what are the next steps to regroup financially? You are responsible for repaying whatever amount is left on your loan, but the way that can be paid may have changed, for better or for worse. There are a few things that you should be aware of in this confusing time.
Remember How a Title Loan Works
An Auto Title Loan is a high-interest personal loan based on the equity of a person’s motor vehicle, and uses the vehicle as a form of collateral. Because the lender takes over the title to your vehicle, they can seize it if you fall behind on payments—sometimes lenders will also ask for the keys, as extra insurance. Title loans tend to have about terms that last about 30 days at a time (Ex. If you borrow $500 on Monday, you’ll be expected to pay back the $500 plus whatever extra fees and interests have accrued in 30 days since that Monday). With LoanMart, payment plans are customizable, so be sure to contact a representative and review the terms of your contract.
Your 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. Having full coverage of your car, as opposed to only having liability coverage, is ideal in this situation, where you still owe money to your title loan lender. This protects a driver from collision and damage, unlike liability coverage, which only covers injury or property damage to another individual. Full coverage on your vehicle will protect you, especially if you have a still have a pending title loan at the time of the accident. Though, all of this coverage protection will be clearer when a driver is determined at fault.
Negotiating Vehicle Value, Insurance Liability, and Loan Coverage
LoanMart hopes this situation never has to rear its ugly head around any of their customers. LoanMart would like to make sure everything goes swimmingly in your loan payment process, because then it goes swimmingly for LoanMart. 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.
If you still owed money on your original auto title loan, your lender, in this case LoanMart, you will expect you to 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.
If you haven’t already, see if an auto title loan is right for you by giving us a call now at 855-422-7412 or fill out a free form online to see if you qualify with LoanMart. Make the most of your vehicle and get the loan you deserve.