Do I really owe almost $2,000???

[armydaddy]

Tennessee,
ok here is the deal... Bought a car through a car lot finance company back in 2002. Had insurance on the car and then wrecked the car. The insurance cut the car lot a check for totaling out the car. As far as I knew the car was paid for. I recieved the title from the insurance company with the lein from the car lot signed off. This is a clear title with me as the owner. Now here is the problem.... The on lot car finance company now has added on a bill for $2,000 onto my credit report stating that I still owe what the insurance did not pay. CAN THEY DO THIS? AM I LIABLE FOR PAYING THEM MONEY FOR A CAR THAT I NOW HAVE A CLEAR TITLE TOO? The woman stated that they were not supposed to have released the lein to me but to the insurance company. Still DON'T THAT MEAN IT's PAID FOR?!?!?!?
ANY ADVICE WOULD BE GREAT!! TY

 

[racer72]

You owe what is called a deficiency, the insurance paid what the car was worth, not the outstanding loan balance. You owe that difference. And legally the car belongs to the insurance company, not you. Yes, it looks like you still owe money on a car you no longer have.

 

[armydaddy]

reply.

Then IF the insurance company now owns the car, why was the title signed off in my name and delivered to my address. Besides why would the car company give the car to the insurance company when there was still a debt owed to them. From the way I understodd it to be is this. If there is an amount due then they KEEP the lein on that vehicle until all amount is paid in full. Is this not the reason for the lein, to insure that they get their money?

 

[racer72]

You state that the title was not suppose to go to you. It should of gone to the insurance company. Your contractual obligations (to pay off the loan in full) overrides your possession of the title. The lein place of the vehicle is guarantee for only a portion of the loan, not the full amount. If you search these forums, you will find plenty of folks in the same boat as you, underinsured and lost on a gamble that the vehicle would be paid off before something bad happened. You gambled, you lost, time to pay up.

 

[armydaddy]

The woman at the car lot is the one who claims that the insurance company was incorrect for sending me the title. NOT ME. Why was there never a bill sent to me IF I still owed that much money? Instead of them waiting 3 years and adding over $700 for intrest on an unpaid debt.