by dcarpenter-johnson » Fri Apr 16, 2010 12:18 am
I make vehicle payments to the registered owner she pays the payment that is under her name to the lien holder I need to get the car fixed (Im the policy holder I make payments to insurance company she is not on my policy I make the monthly car payment thru her) the claims check was made to the lien holder/registered person the vehicle is almost paid off I want to get the vehicle fixed they wrote it off as a loss what can I do as the policy holder? I have the check since I am the policy holder less than 2500 before its paid off.
Posted: Fri Apr 16, 2010 12:29 am Post Subject: retain vehicle
please advise can I sign as the registered vehicle holder she is allowing me to continue on paying payments to keep the vehicle despite what my insurance company says
Posted: Fri Apr 16, 2010 03:17 am Post Subject:
If the vehicle is not a total loss, the insurance company will most likely pay the money to the repair shop where the repairs are being performed, and the lienholder is not a party to the claim.
But you state the vehicle is being considered a total loss, which changes everything.
A lienholder has a security interest in the vehicle. If the vehicle was "totaled" and considered not repairable by the insurer, the lienholder, as an "additional insured," would have a preferred position over that of the registered owner to any claims payment from the insurer, not to exceed the balance of the loan.
In other words, let's say you still owe $2,500 on the note. The vehicle is totaled in a collision, and the insurer determines the value is $5,000. Your lienholder would get $2,500, to pay off the note, and you would receive the balance of $2,500. The insurer now owns the vehicle. They might sell it to you for $2,500. You'll still need money to pay for the repairs, and you'll need bus fare to get around town.
On the other hand, let's say you owe $5,000 and the vehicle is totaled. But the insurer determines the value at $2,500. Your lienholder gets a check for $2,500, and you still owe $2,500. The insurer gets the vehicle, and you need bus fare to get around town.
To avoid this, you would have needed "gap" coverage (common for leased vehicles). In the event your vehicle is totaled but worth less than what you owe, the "gap" coverage pays the difference. Your lienholder gets a check for $5,000, the insurer gets the vehicle, and you still need bus fare to get around town.
You always need to know what your policy covers.
If the insurer pays any money to the lienholder, in order to "keep" the vehicle, you will have to buy it from the insurer. You can't have the money and the vehicle. That's not the way insurance works.
You have really complicated this. You are driving around town in a vehicle that you are not listed as the registered owner? What would have prevented you from being arrested as a car thief if the registered owner called police and reported the vehicle stolen? What would prevent the repo man from seizing the vehicle if the payments you were making to the registered owner were not transmitted to the lienholder? And was the lienholder aware that the registered owner has a side agreement with you? There is often an "acceleration" clause in such contracts that allows the lienholder to call the note and collect the full amount of the outstanding obligation, since their security interest is at risk in a way that they did not originally agree.
You must not be much older than 18 or 20 years of age to have gotten this tangled up.
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