Paying after accident on new purchase

[mmelton2472]

I got into an accident 2 days after purchasing a car. The insurance co is saying it will be a total because of the damages. I put 5,000 down and because the accident happened so soon after, the loan company is not going to put the loan of the remaining 6,000 charged by the dealer. Since there is no loan, will I have to pay the dealership? I might not get enough back from the ins co to pay the balance. Am I legally liable to pay the dealership the full amount?

 

[quincy]

I got into an accident 2 days after purchasing a car. The insurance co is saying it will be a total because of the damages. I put 5,000 down and because the accident happened so soon after, the loan company is not going to put the loan of the remaining 6,000 charged by the dealer. Since there is no loan, will I have to pay the dealership? I might not get enough back from the ins co to pay the balance. Am I legally liable to pay the dealership the full amount?

What is the name of your state, mmelton2472?

 

[Zigner]

I got into an accident 2 days after purchasing a car. The insurance co is saying it will be a total because of the damages. I put 5,000 down and because the accident happened so soon after, the loan company is not going to put the loan of the remaining 6,000 charged by the dealer. Since there is no loan, will I have to pay the dealership? I might not get enough back from the ins co to pay the balance. Am I legally liable to pay the dealership the full amount?

Assuming this question is about US law - yes, you owe what you agreed to pay. It's not the dealer's fault that you didn't obtain adequate coverage.

 

[LdiJ]

I got into an accident 2 days after purchasing a car. The insurance co is saying it will be a total because of the damages. I put 5,000 down and because the accident happened so soon after, the loan company is not going to put the loan of the remaining 6,000 charged by the dealer. Since there is no loan, will I have to pay the dealership? I might not get enough back from the ins co to pay the balance. Am I legally liable to pay the dealership the full amount?

Check with the dealer to see if you purchased gap insurance when you purchased the car.

 

[Zigner]

Check with the dealer to see if you purchased gap insurance when you purchased the car.

I agree that it can't hurt to do so, but the OP has already stated that financing never occurred. GAP would generally have been paid for with the financing.

Again, it can't hurt to ask, but I wouldn't hold out too much hope.

 

[LdiJ]

I agree that it can't hurt to do so, but the OP has already stated that financing never occurred. GAP would generally have been paid for with the financing.

Again, it can't hurt to ask, but I wouldn't hold out too much hope.

He did put 5000.00 down, there is at least a slight chance that the gap insurance payment came out of that.

 

[Zigner]

He did put 5000.00 down, there is at least a slight chance that the gap insurance payment came out of that.

Yes, that is true

 

[mmelton2472]

Im in GA. No there was no GAP insurance and no the finance company will not put finance through. Just wanted to know how that works since there is no loan to cover.

 

[Zigner]

Im in GA. No there was no GAP insurance and no the finance company will not put finance through. Just wanted to know how that works since there is no loan to cover.

The loan never would have "covered" it - you owe the money.

 

[LdiJ]

Im in GA. No there was no GAP insurance and no the finance company will not put finance through. Just wanted to know how that works since there is no loan to cover.

The dealer has only been paid 5000.00 for the car when the price was 11,000.00. They are going to want the rest of their money. I hope the car was worth enough to get you the other 6k owed, plus at least some money for a down payment on another car.

 

[mmelton2472]

Ok thanks. Just wanted to know what is legally my responsibility.

 

[Zigner]

The dealer has only been paid 5000.00 for the car when the price was 11,000.00. They are going to want the rest of their money. I hope the car was worth enough to get you the other 6k owed, plus at least some money for a down payment on another car.

The OP stated: "I might not get enough back from the ins co to pay the balance. "

I have to question that - why would the OP have paid $11,000 for a car that is worth less than $6,000?

 

[mmelton2472]

No im out $5,000. I might get back enough to cover the rest of the 6000 but not much more. Still waiting for the insurance co to get back to me with the final outcome. Just wanted to be prepared on what to expect since the loan isnt going through. Never been in this situation.

 

[mmelton2472]

Im just looking at worse case scenario since Im not sure what the ins co will value my car for. When I looked at KBB for the value of my car it ranges between 6,000 to 8,000.

 

[Mass_Shyster]

No im out $5,000. I might get back enough to cover the rest of the 6000 but not much more. Still waiting for the insurance co to get back to me with the final outcome. Just wanted to be prepared on what to expect since the loan isnt going through. Never been in this situation.

The fact that you paid $11,000 for a used car two days before the accident is pretty compelling evidence that the car is worth $11,000.

The insurance company should cover the value of the car. The balance due has nothing to do with the insurance payout. If they say they're giving you less than $6,000 for a car that was worth $11,000 two days earlier, you'll be well served to contact an attorney.