Totaling your car can ruin your year, but it’s especially traumatic when you still owe money on the vehicle.
If your vehicle is totaled and you still owe more than it’s worth, your car insurance company will pay only actual cash value (ACV) for your vehicle.
Do I still have to make payments on a totaled car?
Do you have to pay back the rest of the loan on a totaled vehicle? The answer is, unfortunately, yes. Even if your car is deemed a total loss and you can no longer use it, you are still responsible for paying any balance left on the car loan.
Can you give your car back to the finance company?
When you return your car to your lender or dealership, it’s called voluntary repossession. You take your vehicle back to your lender or dealership before it’s taken from you. Your credit will still take a hit, but it might be slightly smaller than with involuntary repossession — and can save you fees.
What happens if a financed car is written off?
Basically, a car will be an insurance write-off if it costs more to repair than the insurance company thinks it’s worth. If you’re happy to accept that the car is a write-off, you’ll be offered a settlement price – not surprisingly, this is the amount the insurance company is prepared to pay you for the car.
Photo in the article by “Flickr”