never late on payments on a car

[gtrider]

What is the name of your state? Texas
I don't know what category this goes under…I live in Texas. My dad co signed to get me my 1st car. I have the car payments taken out of my bank acct each month. I've never been late. 9 months later my car was stolen. The police officer called my finance co to make sure the car wasn't repoed before putting the report in.

We thought the gap ins covered theft as well we found out that is a supplement ins and only cover what ins we had and we didn't have theft on our reg policy. I still owe quite a bit on this car and I know I still have to pay for it while hoping my car is found

I have continued to make the monthly payments. Here's the problem. My finance co sent us a letter stating since the car was stolen they want the balance paid in full that they do not handle unsecured loans. My dad called them and asked them what changed that payments are still being made on the car and what made it unsecured? They said since the car was stolen there wasn't anything to keep us from paying. My dad told him he co signed and tried to assure them all payments would continue to be paid that he was not going to ruin his credit rating and that I was trying to build my credit. They said no they wanted the full balance or they would sue us to get it. They told my dad to go take out a loan and pay the balance off or they will take us to court that they will start refusing my payments to show me in default. Why should my dad have to go take out a loan when I'm still making payments and I'm never late on them and will continue to do so until it's paid off? I might be 19 but I'm not going to do anything to ruin my dad's credit or hurt building my own credit.

Can they do that even though I've never been late and I'm still making payments? What happens if they do start refusing my payments? What recourses do we have?

 

[Zigner]

Check the documentation that came with your loan...

But, think of it from THEIR point of view. They only handle secured loans. That means that there is collateral for them to repo if you don't pay on the loan. They don't handled unsecured loans. You ask "What changed?". What changed is that you no longer have the car. Barring something in your contract stating otherwise, yes, the finance co. has the right to call the loan due.

 

[JETX]

We thought the gap ins covered theft as well we found out that is a supplement ins and only cover what ins we had and we didn't have theft on our reg policy

Read the loan agreement. You are REQUIRED to maintain insurance on the car. You didn't comply.

what changed that payments are still being made on the car and what made it unsecured?

The vehicle is your banks 'security'. They have the legal right to repossess THEIR security if you fail to pay. You no longer have THEIR security. Read the agreement. You will see that if the security is no longer viable (as in this case), they have the legal right to accelerate their demand for payment in full.

Can they do that even though I've never been late and I'm still making payments?

Yep.

What happens if they do start refusing my payments?

They won't.

What recourses do we have?

You can make arrangements to pay comply with your agreement and pay in full.