sickestS2k00

hey guys, my friends ford mustang was in an accident in december and it took the insurance company 2 months to settle it while he still continued to make payments on it. It was deemed a total loss in february a week before the payment was due. the next day they took the car so he didnt make the last payment because they took the car. his insurance co. said they would fax some acv report to the bank and that he would get some sort of settlement back and everything would be taken care of. But he says he still gets letters all the time saying he still owes the money. its almost as if the insurance co. never told the bank the car was totalled a month ago almost now. does he have to make the payment? not only that they doubled what he owes now and saying hes delinquent and the bank is gonna tell the credit bureaus. what should he do? i almost forgot, awhile back he did tell the bank they the car was already taken and he doesnt have it anymore but they still send him letters.

billyho96

Unfortunately, the payments are still due on time, regardless of the condition of vehicle (ie totalled). This is true until the car is paid off, either by the debtor or insurance company.

If he were "upside down" in the car note (debt more than the value), he could still owe the bank money even after they are paid what the insurance company paid for the "total loss."

anyone know differently

YellowS2kPwr

That sounds right, although the insurance company should have settled it with the bank immediately. Does your friend owe anything back to the bank after the car has been paid off by insurance? That might be it

koala

did your friend have gap coverage? gap coverage insures that if the car is worth less than the loan, the insurance company will pay the full amount. chances are on a mustang the car was worth less than the loan balance, so he probably still owes a bit of money on the car even tho the bank received payment from the insurance company.

webguy330i

Unless he had gap insurance, I am sure his ins. company hosed him (it's a mustang after all).

How long has he been getting letters? I bet his credit is fuxored by now.

sickestS2k00

i recall he did have gap insurance on the vehicle. im guessing he doesnt owe anything except for that one payment they keep askin for. im guessing the insurance co. never settled the loan with the bank yet. ill tell him this and get back to u guys. thanks for the help.

YellowS2kPwr

He shouldn't owe anything, not even that one payment... this should have gone in effect the next day he called his insurance, what company is he insured with?

pikkashoe

When the insurance companies totals a car, they usually contact the bank and notify them that the car has been deemed a total loss. Before the insurance company can issue payment, they require a guarantee of title from the bank. At that point, the bank is aware the car is a total, and they should not require any more payments. Two payments after the car was already deemed a total, something is not right? Is it a small bank?

Ask your friend, to ask his adjuster when he obtained a guarantee of title from the bank. Now if he does not have gap, then he still owes the deficiency balance if the payoff from the insurance was less than what owed on the car. If he has gap, he needs to file a gap claim with his gap provider immediately, it does not just kick in automatically, he is going to need to provide to them a bunch of paperwork.

NNY S2k

aklucsarits

So he has been getting late payment notices for the past 3 months and just now decided that maybe he should look into it and do something about it???

He needs to call the bank where his car loan is outstanding and explain the situation to them immediately before his credit rating gets destroyed completely. He should tell them that he will work out the issue with his insurer and call the bank bank within 24hrs. If the bank put enything on his credit record for late payment already, he should request that they remove it due to the circumstances.

Then he has to call the insurer and have them explain why the car note was not paid off in full. Someone owes the bank money, and it's either the insurer or your friend. The bank note on the car needs to settled immediately!

Andrew