Do I have to continue paying on a “buy here/pay here” contract if the car is stolen?

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Do I have to continue paying on a “buy here/pay here” contract if the car is stolen?

The insurance company paid them fair market value for stolen car. Do they have a right make me still pay them when they were paid fair value of car?

Asked on September 30, 2012 under Accident Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes, unfortunately, they can keep making you pay if the amount you agreed to pay is more than the amount they received from insurance (and from any payments that you made prior to the theft). That's because you contractually agreed to pay a certain amount, and you have to pay that amount whether the car is stolen, wrecked, sold to another by you, etc. So, say that you agreed to pay $15,000 and they received $11,000 (due to depreciation, the current fair value of a car is essentially always less than the price you agreed to pay for it). Say you also had paid $2,000 before the car was stolen. They received a total of $11,000 + $2,000, or $13,000; you agreed to pay $15,000; they can seek the remaining $2,000 from you.


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