What to do regarding a totaled car with 48 payments left?
Question Details: A friend's husband wrecked her car; he was an un licensed driver and an "excluded" driver on her insurance policy. The car was taken to an auto body shop, where it was deemed "totaled" by the auto shop. The insurance company said they will not pay for anything since her husband was excluded. She still owes 48 months of car loan payments on this car, so it is still owned by the bank. She doesn't know what to do. Should she call her auto loan company or what? Do you have any advice that I can give her?
She doesn't reallty have any rights or options and must pay the remaining 48 months which she owes.
1) A financing agreement for a car is a contract. The car's buyer owes all the money due under the agreement so long as the financing compnay has not committed fraud (did not lie about something material or important to get her to finance the car) and has not breached the terms of the agreement in a material way (e.g. by failing to pay the dealership, so that the car was repossessed).
2) What happens to the car has no effect on the obligation to pay the financing. Even if totalled or stolen, the buyer has to pay.
3) If her husband was unlicensed and excluded, then the insurer does not have to pay: the exclusion specifically, contractually states that they don't, and also, in letting an unlicensed driver drive, she breached her obligations under the insurance contract, and that breach let's the insurer avoid paying her.
So she owes the money, and has no grounds to make the insurer pay.