Can I sue the other driver for the total loan amount ?

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Can I sue the other driver for the total loan amount ?

I was hit head-on by a driver who fell
asleep at the wheel. The vehicle was a
total loss. The loan amount is more
than the vehicle’s worth. Can I sue the
other driver for the remaining balance?

Asked on November 2, 2017 under Accident Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, you cannot. When property is destroyed (for example, a vehicle totalled), all you are entitled to is the value of the property, not the price you paid, the remaining amount due under any loan or financing, or the cost to replace. Price is all over the place, and has nothing to do with value: some people get cars as gifts or for very low prices from family, for example; people vary in how good they are at negotiating; financing always increases the price over a cash transaction; etc. Therefore, if price, etc. were a factor, two people who had the same make, model, year, mileage, etc. car's totalled might get wildly different compenation, which is neither fair nor a predictible, practical way for the law to work. Not only is price highly variable, but 1) it has nothing to do with the at-fault driver; and 2) it is easily manipulated or faked in many cases, such as with false bills of sale or invoices. For all these reasons, the law uses the car's value, which is much more consistent and readily verified, as the benchmark, and so you are not entitled to more than its actual, then-current fair market value.


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