How can I get a new car when I still have a balance left on my loan from the old one?

I just was in an accident and my car was totaled. I didn't buy gap insurance, and since I never completed my photo inspection, I don't have collision coverage either! I still owe $9,000 on my loan and now I need a new car. Do I really have to pay the rest of the loan?

Answer
“I am sorry to hear about your situation. The short answer is yes, you are still responsible for the balance of the loan, even though the car isn’t driveable. There may be a few options that can help you out a bit, though.
If the car is truly damaged beyond reasonable repair, call the local scrapyard and see what they can pay you for the vehicle. You won’t get the full $9,000, but they will give you something for the car.
If your credit is good enough, the dealership may be able to help roll your past-due loan into a new loan. This means your monthly car payment will be higher than average, but it is a way for you to pay the loan off and keep a good credit rating.
When the time comes, use a free car insurance shopping app like Jerry to save on your coverage. Jerry shops with over 40 carriers to ensure you are getting the best rate. “
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Shannon Martin
Answered on Apr 29, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
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