If you owe more than your vehicle is worth, you should take certain steps to protect yourself. These steps include the following:
- Be certain the ACV is correct. It is even more crucial that you receive the true ACV when you will still owe a loan on your vehicle, so you need to check the insurance company’s valuation. In many cases, the insurance adjuster may be offering less than what you are owed. You can get an estimate of the ACV by going to Internet sites such as Kelly Blue Book and finding out the retail price- the amount you would receive in a private sale- and the dealer trade-in amount. Be certain you have your vehicle’s make, model, trim, mileage, and any optional features so that you obtain an accurate figure. You will add the retail and trade-in amounts and divide the total by two to determine the ACV. It is a good idea to repeat this process on more than one website. Doing this could increase your settlement by thousands of dollars- which would be used to reduce the loan balance you owe.
- File a gap insurance claim. If you purchased gap insurance when you obtained your car loan, you can contact the insurance company directly or have your lender to make a claim. Gap insurance may pay the difference between the ACV and what is owed on your auto loan so that you do not owe a balance.
- Pay your car loan payment. Until your insurance claim is settled, you should continue making your automobile loan payments on a time basis to not default on your loan. If you did not purchase gap insurance and your vehicle is totaled, you will owe any balance of your car loan above the ACV payment. You are legally responsible for paying the full balance owed to the lender- even though you no longer have your car payment arrangements.
If you have any questions, you should contact Malman Law Firm at 303-733-7900 or ilianameza@malmanlawfirm.com.