Are you thinking of getting a title loan to solve your financial issues? Car title loans are a great resource for vehicle owners that want to get the most out of their asset. But what happens if you get into an accident with a car whose title is being borrowed on?
Car accidents are sometimes the reality of driving, and they can happen more than you think. Even if you are a safe driver, others may not be, and it can affect your vehicle. If a driver that has a title loan gets into an accident and the vehicle is damaged, it can be a tough situation. Take a look at some of the ways you can better prepare yourself for the unexpected and avoid a negative outcome!
What is a Lien and How Does it Work with a Car Whose Title is Being Borrowed on?
To understand the impact that a car accident will have on a car whose title is being borrowed on, it’s important to understand the vehicle’s role in a title loan.
Title loans will allow a vehicle owner to access their vehicle’s equity and borrow cash! This is done by a borrower using their vehicle’s title instead of just their credit history to secure the loan. The vehicle’s title is collateral, which means that the title loan lender has a lien on the title. A lien is the lender’s legal right to the vehicle while it is still being used as collateral for the loan. For a title loan, a borrower’s eligibility and loan amount are based on the value of their car and its equity.
When a borrower signs a loan contract, they agree to the terms and conditions of the loan. If the collateral for the loan is totaled or takes significant damage in an accident, the vehicle may no longer qualify as collateral.
Even if a vehicle has taken significant damage in an accident, remember that you must continue to make your loan payments if there is a title loan on it. This is only until your insurance claims are settled, or the other party’s insurance claim is settled. Even though your vehicle was in an accident, your payments must be made on time to avoid default.
What Should I Not Do if I Get into an Accident with a Car Whose Title is Being Borrowed on?
Car accidents are often unexpected and can disrupt your life, both physically and financially. The first step you should take if you get into an accident with a car whose title is being borrowed is to call your loan agent. Report the accident to both your loan agent and your insurance company, as withholding this information can be damaging in the long run.
The worst thing you can do for yourself is to avoid the situation. Take care of it immediately and make sure your payments are being made on time. If you can’t afford your payments because of medical bills or other issues, a few things may happen:
- The loan could go into default and the car may be repossessed to satisfy the loan debt.
- If the sale of the vehicle does not cover the rest of the debt, you could still be responsible for the remainder of the principal and interest.
This is a worst-case scenario that can be avoided. There are steps you can take to avoid disaster if you get into an accident with a car whose title is being borrowed on!
Contact your title loan provider as soon as you become unable to make payments or are facing financial issues. You may have more options than you think, and one of these options could be title loan refinancing. ChoiceCash Title Loans is a resource that could help you refinance your title loan and change the bad financial situation into something good.1
What Will My Insurance Do if I Get into an Accident with a Car Whose Title is Being Borrowed On?
Car accidents can happen unexpectedly, but that’s what insurance was made for! Insurance can be a safety net to protect your wallet and person if a car accident were to happen.
The type of insurance you choose before the accident happens will determine what your insurance company will do. There are a few different kinds of insurance coverage that your vehicle can have, but some of the most common are:
- Liability
- Collision
- Comprehensive
Depending on your insurance policy, the damages to your vehicle or self could be covered in the case of a car accident. Liability insurance will cover the cost of damage to other vehicles in the accident as well as their medical care. Liability insurance will not cover your damages, however.
Full coverage insurance is often more expensive, but it will cover the driver in the event of any accident. This includes the damage to your vehicle as well as others. Full coverage insurance is a combination of collision insurance and comprehensive.
If you are looking to get a title loan or do have a title loan, full coverage insurance is the ideal insurance to have. There may be plans that can upgrade your insurance coverage while you are paying back your title loan. If you get into an accident with a car whose title is being borrowed, the best way to protect yourself is with insurance.
What is a Car Accident Settlement?
In the event of a car accident, both involved drivers are required to file a claim with the insurer. After the claim is filed, an investigation will happen to confirm the accident claims and find fault. Once the investigation is over, a settlement offer can be made.
The amount of time that this process takes can vary on the situation and the insurance companies. In some cases, negotiations can be made to raise the settlement if the driver knows the market value of their car. A settlement can be used to cover the cost of repairs or even pay off the remainder of the title loan.
What are the Ways I Can Protect My Financial Future if I Have a Car Whose Title is Being Borrowed on?
With these types of situations, the most efficient way to protect yourself is to be prepared. Preparation can look like this:
- Getting the Right Insurance Coverage
- Driving Safely on the Road to Avoid Accidents
While you may not be able to protect yourself from all car accidents, you can prevent financial devastation by giving your vehicle the right insurance coverage! In the event of an accident, your car’s damages could be covered for by your insurance instead of your wallet.
This could prevent repairs that throw your budget off and allow you to keep making those payments on your title loan to avoid repossession.
What Will My Title Loan Provider Do If I Get into an Accident?
The process after a car accident can be stressful. As soon as you get into an accident, be sure to reach out to your loan agent and discuss the next step and details. The loan agents with ChoiceCash Title Loans can be there to help walk you through the process and offer any available assistance they have!
Your loan terms could be renegotiated to be more affordable, or your loan may even be eligible for refinancing. These options could only be available to you if you reach out! Customers are a priority, and your needs could be met after an accident. Reach out to the experts at ChoiceCash Title Loans at 855-422-7402 to get the answers and financial help you need.1