Car accidents are something that can happen to virtually anybody, no matter how safely they drive. Regardless of if you or the other driver is at fault, auto accidents can be an expensive experience; further complicated if you have a title loan on a car involved in the accident.
If you have just used a car title loan to cover an unexpected expense, getting in a car accident may feel like the end of the world. While there is not one single answer to what happens with damaged and totaled cars with online title loans, there are several factors involved with the matter. Do you know what to do if you get in a car accident when you have a car title loan? Are there things you can do before it happens to protect yourself? Keep reading to learn more!
What Should I Do if I Get in a Car Accident While I Have a Car Title Loan?
The initial steps of dealing with a car accident when you have a car title loan are the same as they would be with any car accident:
- Move to a safe place if possible.
- Turn off your car and make sure you are okay.
- Check on anyone else involved.
- Call the police to the scene.
- If the police cannot get to the scene, if there are no injuries for example, you’ll need to file an accident report through your state’s DMV.
- Gather information:
- You will need things like the vehicle make and model, the other driver’s insurance information, contact information from any eyewitnesses, license plate numbers, etc.
- Take photos of the scene for use during the claims process.
- File an insurance claim.
After you have taken these steps, you should notify your car title loan lender. It is important to note that you will still be responsible for your car title loan payments while your insurance claim is being processed, even if your car is totaled and no would no longer qualify for a car title loan. If your car is declared a total loss, your insurance company should write you a check for the appropriate amount. Because your lender has a lien against the vehicle, you will need to put the money towards paying off the balance of the loan.
What Happens After You Get into an Accident While You Have a Car Title Loan?
If your car is in an accident, an insurance adjuster will look at it and assess the damage. Based on their assessment, they will determine how much it will cost to fix the car. The costs to fix the car will be deducted from the value of the car.
If you have a car title loan on a vehicle that was involved in an accident, you will still need to pay back the title loan. Upon signing the title loan agreement, you were given a loan by using the value of your car as collateral and allowing the lender to be the lienholder on the vehicle title. As part of the agreement, borrowers must also have liability insurance coverage in their car insurance policies to protect all parties in case the car is damaged in an accident.
If the vehicle that is in the accident becomes too damaged and the insurance provider calls it a total loss, then the liability insurance policy could help pay off the title loan. However, if liability coverage is not utilized, the borrower is still likely to be held accountable for repaying the title loan in full. If the borrower has a new car they can use as collateral for the title loan lending or the private loan financing, the creditor may be able to apply your outstanding title loan amount into a new car loan.
Title loan companies understand car accidents are a rather common occurrence and may work with the borrowers to work out a new auto loan payment plan or refinance the loan following the accident. If you’ve been involved in a car accident, speak to the title loan lender as soon as possible to describe the situation.
What Can I Do Before I Get in a Car Accident to Protect Myself When I Have a Car Title Loan?
One of the best things you can do to prepare for an accident is to have adequate insurance. Imagine what would happen if you needed your car to get to work and an accident made it undrivable. You would be responsible for your regular expenses, your car title loan, and potentially a rental car while your ride was in the shop or while searching for a new car. That would be quite stressful. With the proper coverage, your insurance company could not only pay for the car repair but reimburse you for rental car expenses. Depending on your car title loan agreement, your lender may require you to take on additional insurance. This ensures repayment of the loan in the event of an accident.
It is also important to be familiar with the value of your car. If you have gone through the car title loan process, you probably have a rough estimate of what it is. You should also know the details of your car insurance coverage. It is also important to consult state laws, as they may mandate coverages that are available or required.
What Happens If My Car Is Totaled and I Have a Title Loan?
When you take out a title loan, most lenders will let you keep and drive your vehicle as long as you make the agreed-upon payments. But what happens if your car is totaled and you have a title loan? The situation can seem overwhelming, but don’t panic! Your car insurance policy (something that most title loan lenders require for title loans) should be helpful, and your lender should be accommodating as well.
If your car is totaled, the first thing you should do is let your insurance provider know. If a car accident occurs due to someone else, make sure to have the other person’s car insurance as well. Both parties should let their insurance companies know about the accident.
Most auto insurance companies will ask for your statement and ask for photos of the damage. The good news is that most basic car insurance policies do offer full collision coverage/comprehensive coverage which will cover a vehicle if it is totaled. Keep in mind, every policy may differ when it comes to determining whether a vehicle is a total loss. Generally, if the cost of repairs are a huge percentage of your vehicle value, then your insurance company will consider it a total loss. If the accident is someone’s fault, liability coverage from the insurance should take care of damages for both vehicles.
When your car is totaled, your insurer will come up with a fair market value for your car and should provide reimbursement for the vehicle. Keep in mind after an accident your deductible will go up each month. Once you have your insurance coverage sorted out, all that is left to do is figure out where to allocate your funds.
Max Cash® Title Loans Can Help With Emergency Expenses
Looking for money to cover an emergency expense on short notice is stressful enough without having to worry about what happens if your car gets totaled in an accident. Now that you know a little more about what happens when you have a car title loan and your car gets in an accident, you can prepare by making sure you have the correct amount of insurance to protect yourself. You may be able to get a title loan on a damaged car (meaning a salvage title) but keep in mind it will be harder to find a lender willing to work with you.5
If you have any other questions feel free to contact Max Cash Title Loans. As a financial referral service, we are familiar with many of the ins and outs of car title loans. Call Max Cash Title Loans any day of the week at 855-561-5626 or visit us online to speak with a virtual assistant!