Expert: Richard Hixenbaugh - 4/22/2009

Question
QUESTION: My car has been deemed a total by my insur. I have Gap Insur also. I owe 11,200. to finance Co. for a brand new car worth about 8,700. Nothing wrong with the car. I'm the only owner. Cosmetic damage only. No broken windshields. I cannot afford to let my car go. How does this work. What is my approach and how can I keep my car or get it replaced? What do I do. Very nervous. Yes My Insur & Gap are aware. My Finance Co is not. Yet. I've put everything on hold til I can figure out the best plan of attack. It will be a month this Friday since the storm. Can you help? I'm afraid Insur or Finance Co, one of them take my car? I have to keep this car. I cannot be refinanced, nor have ANY savings to buy another. With the banks the way it is no one will refinance without a substantial down payment. Ha Ha!

ANSWER: Hi Debi,

Once an insurance company determines a vehicle to be a total loss, there is not much you can do. That will pay you the market value of your car and your GAP insurance will pay the balance to the finance company. In some cases you can buy back the car from the insurance company but the process is very costly and difficult and then once you buy it bac and have it repaired it will only be worth half of what it was because it will have a salvage title. You will be better off to let it get totaled. Perhaps you could talk to your finance company about setting up a new contract for another car.  

I hope this helps
Richard Hixenbaugh

---------- FOLLOW-UP ----------

QUESTION: Hi Richard, thanks for the answer. It would appear that I am screwed seeing with the economy the way it is. No I am not rich. #1 coming up with money for yet again a down payment & someone to finance me or #2 coming up with the money to now buy a car that clearly does not look brand new any longer and will not be worth it. Why do we have insurance policies again? I thought they were to help and cover us? Thanks for your help.

Answer
Hi Debie,

Unfortunately, insurance companies are not the big warm and fuzzie companies that their tv commercials would lead you to believe. They are in business to make money and the only way an insurance comapny makes money is to collect premiums and then find ways to not pay claims or find ways to reduce what they have to pay.

It's unfortunate, but true.

Richard Hixenbaugh