What Happens if I Get into an Accident While I Have a Car Title Loan?
A title loan can be a popular secured loan option for those who have a low credit score, and in most cases, you can keep and drive your vehicle while repaying your loan. But what happens if you get into an accident while you have a car title loan?
Car accidents happen a lot more than you think. According to a recent study published by the Bureau of Labor Statistics, around 13 car accidents occur every minute. Even if you are a responsible driver, you could still be involved in an accident due to the negligence of others. You can’t always prepare for a car title loan accident!
If you have a title loan and are involved in an accident, you are still responsible for repaying the remainder of the loan. Even if your car is severely damaged! If you fail to make payments on your vehicle, you will default on your loan, and that has serious consequences. Keep reading to learn more about your options if you get into a car accident with a title loan.
Should You Get Your Insurance Involved if You Get into an Accident with a Title Loan?
Almost all title loan lenders will require that their borrowers will have car insurance (coverage may depend on the needs of the lenders). Title lenders require applicants to have a particular type of insurance coverage for a specific purpose. Although there are options available, you want to avoid getting into a car accident with a title loan. Having the proper car insurance coverage can protect you in the event that your vehicle is damaged, however.
Your insurance company should be able to cover any damages if you have caused a car accident. However, the amount of coverage will depend on your specific insurance policy and the liability coverage that it offers. Most basic coverage will take care of medical bills related to personal injury or any injuries to the other driver. Depending on your type of coverage and the exact policy that you have, the necessary repairs to your vehicle could also be covered by insurance.
If your car is damaged beyond repair due to an accident or unforeseen natural disaster, comprehensive coverage will make sure that your car is repaired or replaced (up to the vehicle’s actual cash value). However, if another person is involved in the accident or is at fault, make sure to get their insurance company’s information and report the incident to the police. You will need to discuss the accident with your own insurance company as well.
Let Your Title Lender Know About the Accident While You Have a Car Title Loan
In addition to contacting your insurance company, you should contact your title lender as well. When you take out a title loan, the lender will become the lienholder. They have a legal claim to your vehicle until the loan is completely paid off. They will need to know what state the car is in.
From here, your insurance company should be able to take care of the related expenses costs (in most cases).
But what if your insurance doesn’t cover the expenses for car repairs or doesn’t provide a compensation amount for the total loss of your vehicle?
Well, don’t panic there are a few options that may work for you. Keep reading to learn more!
Paying out of Pocket for the Remainder of the Auto Title Loan
Let’s say that you only have a few more payments left on your car title loan. And the loan amount is payable. One option is to just pay off the remaining balance with your title loan lender.
A New Repayment Plan with Your Existing Lender
If you have a large loan amount left to pay for your loan, you may be able to work with your existing lender and negotiate a modification to your loan terms. This could help you get a new payment plan that is based on your current financial situation. Keep in mind that this may not be a possibility depending on your lender. Your loan will need to be in good standing to explore this option.
Make Insurance Coverage a Priority In Cas You Get into an Accident with a Title Loan
And so, as you can see, having insurance coverage before taking out a car title loan can be extremely helpful and can save you a ton of hardship that can come after an auto accident. This is one of the main reasons that title loan lenders will require their borrowers to have insurance coverage while they are repaying their car title loan.
Are you looking for a car title loan, but not sure where to start? At Max Cash® Title Loans, we are the #1 nationwide online title loan marketplace. And, we make it easy to connect with auto title loans and title loan lenders.5 To get started with an online car title loan simply head to our website to apply or give us a call at (855) 561-5626. Once approved for an auto title loan the funds can be available in as little as 24 hours.1 2 5