Total Loss Vehicle Value: Market Value vs. Your Car Note


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Total loss vehicle accidents are very difficult to obtain compensation for damages or resolve. Typically, insurance companies are wary of declaring a vehicle as destroyed, and will do whatever it needs to do to pay the least amount of compensation to a damaged party.

Total Loss Explained

Insurance companies define total loss as occurring when the cost of repairing a vehicle is greater than the blue book value of a car. In this circumstance, insurance companies will pay the automobile owner for the value of the car rather than repair the vehicle. It is irrelevant if the owner wants the car repaired; obtaining repairs would require extensive negotiations which may require attorney involvement.

The Effect of Your Car Note

Your car note includes the purchase price of your vehicle and how much you owe on it before it truly becomes yours and not property of the bank through which the purchase was financed. In terms of determining total loss, the amount you owe on the car is irrelevant. This means that you could end up only receiving the blue book value of the car, regardless of the fact that you owe more than what you are compensated.

Negotiating with the Insurance Company

Potentially, you may be able to negotiate with the insurance company to have your car repaired rather than identified as a total loss. Typically, this negotiation requires that the discrepancy between value and repair cost being relatively small. However, you might also be able to induce the insurance company to provide you with the value of your car and use that money towards its repairs. This, though, would require you to make up the difference from your own pocket.

Negotiating with the Note Holder

Sometimes, if an automobile is totally destroyed a note holder can be induced to accept the amount of money you were paid for the vehicle, namely its blue book value, rather than the total amount of money owed under the note. Many times, this occurs when it becomes apparent that the value offered is the most money the note holder will receive. These negotiations can be quite difficult; you may want to hire legal assistance if you attempt this route.

Getting Legal Help

If your automobile has been destroyed and its value is less than what you owe for it, seek legal assistance. Remedies may be negotiated with either the note holder or  insurance company, but a lawyer is almost certainly necessary to be successful.

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