Hello, my brother's car is considered a total loss after a drunk driver hit it while its parked. It is a financed car and we dont know if he can use the check he will get to buy a new one or he needs to pay his loan using that check since the financial advisor from the dealership in which he bought the car from said that loan must be paid first. The car was brand new and is a month old, he have an interest of almost 20k and the SGI is only offering the srp of the car. He is afraid that he will be in 20k debt without a car. Please kindly give an advice, thank you!
Posted by Salt_Faithlessness24
7 Comments
The check will be sent to the finance company.
If it’s not enough to cover the loan and he doesn’t have GAP, he will owe the balance of the loan.
The check will be sent to the finance company. If it doesn’t cover the entire loan amount you would need to pay it out of pocket if he didn’t get GAP insurance.
Since there is a loan on the car, the settlement check will go to the lender first. If that settlement doesn’t pay off the loan, your brother will have to pay the difference. If he didn’t get GAP coverage, he’ll have to pay that out of pocket.
All the above:
1) if he had GAP coverage the loan will be paid off , highly unlikely he’ll get any money at all unless he put a bunch of cash down –
2) if he doesn’t have gap coverage , assuming he paid msrp and financed the taxes and fees – ex: 34,000$ + etc = 37,000$ financed , market value for the car is 32,000$ , he’d then have to write a check for 5,000$ to pay off the loan
Thank you for all the replies, unfortunately he doesn’t have GAP insurance so he’ll have to pay the rest of the financed amount of 20k. I appreciate y’all
See an attorney if the drunk driver has funds. You can sue for additional from driver
A month old new car should qualify for total payoff less reasonable allowance for mileage.
NAL, but that only sounds reasonable. If your insurance won’t help, get your own lawyer.