In most serious road accidents, one of the potential outcomes is that your car may be totaled. If you aren’t sure of what to do if your car is totaled and you have a title loan, you may be feeling overwhelmed.
If you’re like most borrowers, your vehicle is your main source of transportation. Totaling your car can be devastating financially, especially if you have a lien on your vehicle. While it can be difficult to handle any tough financial situation, you can prepare yourself for the expectations of an online car title loan company and your insurance if this situation occurs.
How Do Title Loans Work?
Title loans are a unique type of installment loan that can allow you to access the equity in your car and turn it into cash. By using the title of your vehicle as collateral for the loan, you can access up to 75% of your car’s value!
Title loans are secured loans and are collateral-based. A lien is placed upon your title throughout the loan since it is the leverage for your cash. A lien is your title loan lender’s legal right to your asset while you are paying off your loan. Using collateral for a loan helps bypass the tough eligibility requirements that come from unsecured loans. Secured loans like title loans that use collateral are flexible during the approval process and borrowers from all types of credit histories can take advantage of it!1
Since there will be a lien on your title, if you total your car, the asset is no longer valuable. This may change the terms and conditions for the loan, and you may no longer have a vehicle that qualifies as collateral. Title loans allow you to borrow off of the equity in your vehicle. Equity is based upon the value and current condition of the car. If that condition changes and the car is unable to be salvaged, you are still responsible for meeting the terms of your loan. This includes:
- Making Your Payments on Time
- Finishing Up Your Loan Terms
- Or Finish Settling a Claim with Your Insurance Company
If Your Car is Totaled and You have a Title Loan, Here’s What to Expect
While car accidents are overwhelming and can be financially devastating, they are something you should prepare for as a vehicle owner. You may not know what to do if your car is totaled and you have a title loan on your car. The impact on your life can be devastating, especially if your vehicle is your only source of transportation and you do not have the means to replace it.
If your car has been totaled, it means that the insurance company has decided the vehicle is no longer worth fixing. The repairs would cost more than the car is worth, so it is simply not the best decision to fix it. Every insurance policy is different, however.
How Do Insurance Companies Handle Totaled Cars and Title Loans?
Most title loan companies require a borrower to have car insurance for a reason. The right car insurance coverage can lessen the devastating impact this situation may have on your finances! The first step is to find out whether or not your vehicle will be considered a total loss. Many insurance companies will consider a vehicle to be at a total loss if the repair cost is more than 80% of the vehicle’s market value. This means if your vehicle has a market value of $10,000 and the repairs will cost $8,000, the vehicle may be considered a total loss. The actual percent of damage to your car must be decided by an insurance adjuster. Depending on your insurance policy and the circumstances of your vehicle accident, your insurer may owe you the cash value of your car.
During the approval process for a title loan, a loan agent will look at the condition of your car as well as other factors to determine its worth. This is the same process that an insurer will use for determining the actual cash value of your totaled car. They will consider these factors about your vehicle:
- The Make and Model of the Car
- The Style of the Car
- The Year it Was Made
- The Current Mileage on the Odometer
- The Salvage Value of the Car
- The Demand for Your Vehicle on the Market
All of these factors will contribute to the cash value of your car. If you do receive this from your insurance company, it may be used to cover the remaining balance of your title loan. Before contacting your insurance company, it may be best to have an understanding of what your vehicle is worth and what kind of coverage you have.
What Do Title Loan Companies Expect if Your Car is Totaled, and You Have a Title Loan?
If you aren’t sure of what to do if your car is totaled and you have a title loan, you have resources available. Choosing the right title loan company to work with can make or break this unfortunate experience!
If you have totaled your vehicle, the situation may be devastating, but the wrong title loan company can make it worse. That’s why ChoiceCash Title Loans is completely transparent with borrowers about what to expect during the title loan process. ChoiceCash Title Loan agents are available seven days a week for extended hours in case of any type of emergency- including your car being totaled!
You have loan agents that have your back and can answer any questions you might have about your title loan. If you have any questions about what the expectations are in this situation, give a loan agent a call at 855-422-7402.
How Can I Avoid This Situation as a Title Loan Borrower?
If you aren’t sure of what to do if your car is totaled and you have a title loan, the first step is to understand that you have resources available.
Car accidents can happen at any time, to anyone! While you may not be able to avoid a serious car accident in your lifetime, you may be able to be prepared for it. According to the National Safety Council, 77% of drivers have been in a car accident. Your likelihood of getting into a serious car accident is much lower, but it is still a possibility! The most common types of accidents are rear-ended collisions and cross-traffic accidents. Being an alert and defensive driver can help you avoid other driver’s mistakes, but a car accident is still a possibility if you are on the road.
As a vehicle owner, the first thing you should do is understand what type of insurance coverage you have. Often, it is between:
- Full Coverage, or
- Liability Coverage
If you only have liability coverage, you may find yourself in a tougher situation if you get into a car accident. Liability coverage will only pay for the damage to property or person caused by a car accident if you are at fault. When the other party is uninsured and at fault, you may not have the proper coverage to avoid paying out of pocket if your car has been totaled. Full coverage can be a more ideal option in this scenario!
When you are looking to apply for a title loan, it can be in your best interest to invest in full coverage insurance to avoid a devastating financial situation! With the right insurance coverage, you can be better prepared, and may even avoid paying anything out of pocket in this situation. If you have any questions about the type of insurance that would work best with your title loan, give a ChoiceCash Title Loan agent a call at 855-422-7402.
Where Can I Find a Responsible Online Title Loan?
Choosing the right title loan is a crucial step to avoiding an overwhelming financial situation if your car is totaled and you have a title loan on it. While you may not be able to avoid a car accident, you can choose a title loan company with loan agents you can depend on in a crisis!
ChoiceCash Title Loans was made with the borrower in mind. That’s why loan agents are available seven days a week for extended hours. If you’re ever in a tough spot during your loan term, they are just a call away at 855-422-7402 if you have questions!
You can have all of your insurance coverage and title loan questions covered during the online approval process for a ChoiceCash Title Loan. Get started on your loan today by calling an agent or heading over to the website to inquire online! It can take just minutes to get a free online quote today.