If I am still financing a car and totaled it, what do I do now?
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If I am still financing a car and totaled it, what do I do now?
I haven’t yet contacted the dealership. Am I eligible for a felony?
Asked on May 5, 2014 under Accident Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
No, it's not a felony, unless have committed insurance fraud, or set it on fire (arson), etc. However, you are still liable to pay off the full value of the financing or contract for the car, even if that exceeds the value of the car when it was totalled or exceeds any insurance proceeds you get. For example: say that that the total cost to finance the car is $25k and that you've only paid $500 so far. Say that when you totalled it, due to depreciation, it was worth $20k. You owe the dealership or lender (whomever provided the financing) $24,500 (the value of the financing less the amount you've paid to date), even if you only get $20k from your insurer--or even if you do not receive anything from insurance.
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