Car Accidents and a New Auto Loan

Car accidents can be traumatic. If you are able to walk away with just a few scratches from a car accident, you are very lucky. Each day you hear about car accidents and some of those people do not make it. When you are driving a car, always remember to be careful and cautious. If you do have an accident and your car is totaled, can you get another auto loan?

The answer to that question depends on several things. Do you currently have insurance? If you do, the insurance company will total out your car and negotiate a payoff for you based on the condition of the car prior to the accident. They will then go after the person at fault to recoup their payments. If that person did not have insurance, they will go after them personally. The good thing is that if you are fully covered, you won’t have to worry about that. It is possible to get a new car and a new auto loan. It may take a little time to sort everything out. Most insurance companies offer rental car coverage. You can use this until you get everything squared away.

Once you speak with the insurance company and get the payoff figure, it may very well be lower than the amount to pay off your auto loan. You will then need to get another auto loan and add that amount on to the loan which will increase your payments. If you need a car, you don’t have a lot of choices when you are not able to drive your existing car due to damage. Most loan companies will work with individuals who have had this happen to you.

You can also get ‘gap’ insurance, which is usually offered by the loan company but sometimes through insurance companies. This covers the potential gap that may be there as a result of owing more on your car than it’s worth. There is a cost to this type of guarantee and it is usually rolled into your auto loan payment increasing it each month. You have to decide what choice is right for you. If you don’t get the ‘gap’ insurance, you will have to roll the remaining balance onto a new car or pay off the other loan before you get another car; however, finding financing is important and can be done.