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I paid off my vehicle recently (around $9,000 final payment, paid off early). I had gap insurance on the vehicle, a week after I paid my vehicle off I was in an accident that was not my fault but my car was totalled. Their insurance company (who I'm filing the claim through) is trying to lowball me and offer me $5,000 for my vehicle. I feel like I am being penalized for paying my car off early. Is there anything with my gap insurance that could help me in a situation like this?
More information is needed. What kind of vehicle - year, miles, etc?
Since there is no longer a lien on the vehicle, I don't think the gap insurance will factor in at all. If you pay a car off early, I believe you may be able to get a partial refund (depends on the terms of the policy).
The confusion many have regarding this subject comes from the failure to view the car and the loan as two separate items not really related to each other. True in the start of the loan the car may be considered as collateral but the relationship changes every month.
I paid off my vehicle recently (around $9,000 final payment, paid off early). I had gap insurance on the vehicle, a week after I paid my vehicle off I was in an accident that was not my fault but my car was totalled. Their insurance company (who I'm filing the claim through) is trying to lowball me and offer me $5,000 for my vehicle. I feel like I am being penalized for paying my car off early. Is there anything with my gap insurance that could help me in a situation like this?
Thanks
You are overvaluing your car which is a very common issue. People want to believe their car is worth more than what it really is.
I got this number from Kelly's Blue Book. You can check it yourself if you want. Kelly's Blue Book gives a value or around $3000 for your car.
My initial reaction is you are not being "low-balled". How much do you think an eleven year old car with 150,000 miles on it is worth?
Markg, $3,000 on the low end for a trade in value on a standard Cherokee, this is a limited 4x4 trail rated tow package vehicle. Nada was showing around $8,900 for private sale, with that said do they normally pay out a trade in value? That wouldn't make much sense as I never trade cars in since it's a terrible value for the seller, pretty much giving the car away. Regardless of how much it may be worth, if the accident happened a week earlier gap insurance would have covered it all and I could have used that $9,000 I used to pay it off towards a new vehicle, that's why I was hoping there is something with gap insurance that helps out with a situation like this.
Markg, $3,000 on the low end for a trade in value on a standard Cherokee, this is a limited 4x4 trail rated tow package vehicle. Nada was showing around $8,900 for private sale, with that said do they normally pay out a trade in value? That wouldn't make much sense as I never trade cars in since it's a terrible value for the seller, pretty much giving the car away. Regardless of how much it may be worth, if the accident happened a week earlier gap insurance would have covered it all and I could have used that $9,000 I used to pay it off towards a new vehicle, that's why I was hoping there is something with gap insurance that helps out with a situation like this.
Unfortunately, the fact that you paid it off early was a calculated decision you made and in this case, it bombed from a GAP insurance standpoint. You have no GAP anymore between the value and loan balance so nothing to cover.
Now, onto the issue of value. What method of valuation did they use to arrive at their valuation number? They had to use something?? Was it some "book" value? Was it what Super Sly Used Car Lot was selling one for? Was it based on a computerized cost containment system? Did they consult a Palm Reader? They had to use some method and the key to always getting a much better settlement is using their own system against them. So, what did they use?
Also, find out your rights when dealing with their insurance company. Not all states have regulations that require the other party's insurance company to treat you as honestly or even fairly as they require your own. Knowing what recourse you have if they play games can save you a lot of grief down the road.
Markg, $3,000 on the low end for a trade in value on a standard Cherokee, this is a limited 4x4 trail rated tow package vehicle. Nada was showing around $8,900 for private sale, with that said do they normally pay out a trade in value? That wouldn't make much sense as I never trade cars in since it's a terrible value for the seller, pretty much giving the car away. Regardless of how much it may be worth, if the accident happened a week earlier gap insurance would have covered it all and I could have used that $9,000 I used to pay it off towards a new vehicle, that's why I was hoping there is something with gap insurance that helps out with a situation like this.
If you aren't happy with the offer you have two choices:
1 - Sue the other driver and prove to a judge that your car is worth more than $5000.
2 - If you have collision coverage, make the claim on your own policy and see if you get a better deal.
Markg, $3,000 on the low end for a trade in value on a standard Cherokee, this is a limited 4x4 trail rated tow package vehicle. Nada was showing around $8,900 for private sale, with that said do they normally pay out a trade in value? That wouldn't make much sense as I never trade cars in since it's a terrible value for the seller, pretty much giving the car away. Regardless of how much it may be worth, if the accident happened a week earlier gap insurance would have covered it all and I could have used that $9,000 I used to pay it off towards a new vehicle, that's why I was hoping there is something with gap insurance that helps out with a situation like this.
The vehicle quoted by Kelley's Blue Book is a Grand Cherokee, limited edition. It has 4 wheel drive. The towing package and the fact that it is "trail rated" might add modestly to the overall value.
What you are entitled too is "fair market value". I would say fmv is trade in value plus reasonable dealer profit for selling the car. Add all that together and I think it comes close to the $5,000.00 settlement you've been quoted.
An eleven year old car with 150,000 miles typically will not last long. Some might describe it as being on its last legs.
I certainly wouldn't pay anywhere near $9,000 for such a car. The fact that it has this price tag does not mean it has a fair market value of $8,900.
Does the vehicle have new tires or any new work performed within the last calendar year? Those things might modestly increase the value.
I don't profess to be an expert about GAP Insurance. However, it seems to me that once the car is paid off its probably no longer applicable. However, the policy language would determine if you could get anything out of it in this situation.
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