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Sometimes, life can really seem unfair. Let’s say you have recently taken out a car title loan to help cover an urgent expense. Then, just when things are getting back on track and you’re repaying the loan, the vehicle you used as collateral is stolen. Unbelievable, right? What should you do now? The good news is everything can turn out fine, when you know what to do if your car is stolen with a title loan.
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Understanding Title Loans
An auto equity loan is a type of secured loan that lets you use a vehicle that’s registered in your name as collateral to access cash quickly. To qualify, your car must have enough value to cover the loan. You’ll also need to provide proof of income to demonstrate your ability to make timely payments. Most lenders also require applicants to be at least 18 years old and live in the state where the loan is issued.1
Depending on state regulations and lender requirements, you may be able to borrow up to 50% of your car’s equity. Title loan lenders determine the equity based on the vehicle’s make, model, year, mileage and general condition. With online title loans, this evaluation is typically based on photos you’ll submit during the online application process, whereas store-based loan providers may require an in-person vehicle inspection.
With LoanMart-serviced title loans, the amount you borrow is up to you – as long as it’s within your approved range.1 After funding the loan, a lien is placed on your car’s title and removed when you pay off your debt. While you’re repaying your loan, you keep possession of your vehicle and can continue driving it as long as your account stays current.
Note that with an auto title loan, while you do retain ownership of the automobile, the lender has a legal claim on your car until you’ve paid off the loan. In other words, you remain responsible for the loan, even if someone steals your car. This means any auto insurance payout will go to the lender first. You’ll then get the difference between the balance that was owed and the car’s cash value that your insurance covered.
What to Do Immediately After Your Car is Stolen
If you think someone has stolen your car from somewhere other than where you live, get to a safe, public space before making any calls, especially if you’re in a high-risk area. After making sure it wasn’t towed, call the police to file a stolen vehicle report.
In most cases, you’ll need to be ready to provide the following key details.
- License plate number.
- Vehicle Identification Number (VIN)
- Make, model, year and color
- Mileage and distinctive features, such as dents, scratches, custom modifications, stickers or GPS tracking devices
Granted, you may not know all of this information off the top of your head. This is why it’s a good idea to keep photos of your registration and insurance cards in your phone. This will give you ready access to that information should the need arise. It is also why you should never leave your phone in your car.
Filing a Police Report for a Stolen Vehicle
When reporting the theft, you’ll be asked to state when and where you last saw your vehicle, what personal belongings were in it and where your keys were at the time of the theft. Be ready to provide all of this during the initial call. Adding information later can hamper recovery efforts.
The sooner you provide accurate information, the earlier law enforcement officials can get the information into the national database. This will alert officers nationwide. The local police may conduct an initial investigation, which can include reviewing surveillance cameras or any street license plate readers. Get the police report number and a copy of it for your insurance company and the title loan lender.
Insurance Considerations for a Stolen Car with a Title Loan
Here’s where you learn the difference between comprehensive and collision insurance coverage. Many people will opt only for collision insurance in order to save money on their car insurance premiums. While a collision policy will take care of anyone they hit, it won’t cover their cars against theft. You’ll need a comprehensive insurance policy to get that coverage.
Assuming you’re covered, your next step should be to contact your insurance company by phone, app or online portal to get the claims process started. Be prepared to provide the police report number and inform the agent you have a car equity loan you’re paying off.
Your insurer will usually assign an adjuster to verify your coverage, interview you, review reports and assess the vehicle’s value. Depending on the nature of your policy, the insurer will either pay the claim – less your deductible – based on the car’s actual cash value or agreed value. Actual cash value takes depreciation into consideration when determining how much to compensate you for the loss. Agreed value is an amount you declare to the insurance company when purchasing the policy, which it will pay in the event of a loss. Agreed value is usually applied to collector cars and rare sports cars.
Either way, the insurance company pays your lienholder first if you have a car collateral loan in place. You will then be responsible for any shortfall if the insurance payment is less than the loan balance. Processing the claim typically takes between 30 and 45 days, allowing time for an investigation and potential recovery of the vehicle. You’ll continue paying on the loan as if the car is still in your possession if you have no coverage.
Notifying Your Title Loan Lender
Once you’ve reported the theft to the police and your insurance company, it’s time to get in touch with your lender. Doing so promptly may help settle your debt before your next loan payment comes due. Conversely, delaying this step can result in continued payment obligations and penalties.
Additionally, failure to notify your auto title loan lender of the theft could result in significant financial and legal consequences. Even if you lack insurance, you should still alert your lender. If you have a LoanMart-serviced loan, call us at 855-422-7412 to explore your options.
Preventive Measures for Future Protection
To protect your car against theft, always lock the doors, close the windows and take your keys with you when leaving it unattended. Park in well-lit, high-traffic areas, turning the front wheels toward the curb to prevent illegal towing. Hide valuables out of sight and consider installing a GPS tracking system.
Make sure you have ready access to your insurance policy number, VIN and license plate number, even if the car is gone. An easy way to do this is to take pictures of these documents and keep them on your telephone. It’s also a good idea to have a loan payment put aside, in case there’s a delay in the insurance payout.
If you have a LoanMart-serviced title loan, know we will do everything we can to help you resolve your situation quickly. So don’t let the possibility of theft deter you from taking advantage of title loan borrowing if you need quick access to cash. Apply for your title loan today!
