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What Happens If You Get Into an Accident with a Financed Car?


If you’re in an accident with a financed car, insurance typically covers damages. If the car’s totaled, insurance generally pays the lender. 


Accidents can happen at any time, and they’re stressful enough on their own. But when your car is financed, there’s an added layer of complexity. So, what happens if you get into an accident with a financed car? It’s a question many drivers have, and it’s essential to understand the steps and implications. For those in St. Louis, turning to an experienced St. Louis car accident attorney at The Hoffmann Law Firm can help guide you through this challenging situation.

The Basics of a Financed Car

Before delving into the specifics, it’s crucial to know what it means when we talk about a “financed car.” Simply put, if you’re making monthly payments on your car to a bank or other lender, your vehicle is financed. You don’t fully own the car until you’ve completed all the payments.

Insurance Comes First

Having a financed car means you are probably required by the lender to have comprehensive and collision coverage. This is in addition to any state-required liability insurance. After an accident, your insurance company will be the first place to turn.

If the accident wasn’t your fault, the at-fault party’s insurance should cover the damages. However, if the other party doesn’t have sufficient insurance, your policy might come into play, depending on your coverage.

What About the Loan?

When you have an outstanding loan on your vehicle, and it gets into an accident, the loan doesn’t disappear. If the vehicle is repairable, the insurance payout will go towards the repairs, and you’ll typically continue making payments as before.

However, if the car is declared a total loss, the insurance payout will generally go directly to the lender. If the payout doesn’t cover the full loan amount, you may be responsible for the remaining balance. This can be a heavy burden, especially when you no longer have the car. Gap insurance can help in such cases, covering the difference between the car’s depreciated value and the remaining loan balance.

Potential for Decreased Value

Even after repairs, a car that’s been in an accident can have a diminished value. If you decide to sell the vehicle before paying off the loan, you might get less than expected because of its accident history, making it harder to pay off the loan.

The Importance of Legal Guidance

Remember, each case is unique. While the above gives a general overview, the specifics of any accident can greatly vary. It’s essential to consult with an experienced attorney to understand your rights and potential compensation, especially in a complex place like St. Louis.

For those in St. Louis, The Hoffmann Law Firm offers a wealth of experience to rely upon. With over 25 years in the field, handling thousands of cases, we provide the guidance you need in these tricky situations. And the best part? You don’t pay unless we get you compensation. 

St. Louis Car Accident Attorney

Accidents with a financed car add an extra layer of concern for the driver. From dealing with insurance companies to worrying about remaining loan balances, it’s a challenging path. However, armed with the right information and the support of an experienced car accident attorney near you, you can confidently navigate this.

So what happens if you get into an accident with a financed car? Remember, it’s always best to discuss your specific situation with someone who has a deep understanding of the nuances involved. In St. Louis, The Hoffmann Law Firm is here to help. With our extensive experience and a strong commitment to our clients, you’ll find the support and guidance you need every step of the way. Contact us 24/7 to ensure you’re making informed decisions about your future.

Free Consultation with a St. Louis Car Accident Lawyer

Don’t talk to an insurance claims adjuster before speaking with The Hoffmann Law Firm, L.L.C. We can help you avoid making statements that may affect the outcome of your case. The consultation is free; you don’t pay unless we get you money!

Updated: May 10, 2024