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My Car Under Finance Was Written Off In Flamorough

My Car Under Finance Was Written Off In Flamorough

Today’s post is in response to a customer query we had this morning. It’s one we haven’t seen in a while and seemed like a good topic for our blog. The question was ‘my car under finance was written off. What do I do?'


Our Flamborough auto loan team explains.


What is an insurance write off?


It seems insurers will write off cars for almost any reason now. The cost of repairs is climbing steadily and the insurer has to assess whether repairing it makes economic sense. That assessment if often not what you want to hear.


An insurance write off is when your insurer considers the cost of repairing your car to be more expensive than replacing it. This can happen if the structure of the car or some of the technology is damaged and will cost a lot to repair.


It can also be a safety issue that causes the insurer to write it off.


For example, if your car is worth $10,000 and a collision bends the subframe or chassis, it could cost much more than the car is worth to repair.


What happens to my auto loan after a write off?


Nothing happens to the auto loan. An insurance write off is of no interest to your lender. They still lent you the money and will still require paying back. The two situations are completely separate.


A write off is the insurer’s problem to deal with and not the lender. You’ll still need to make payments as usual while you’re working things out with the insurer.


This is a very important point to understand. Dealing with the insurer and with your lender are totally separate issues. You will still need to make your loan payments otherwise you could default.


Even though you’re paying for a car you no longer have, you are still liable for the loan until it’s paid in full.


Hopefully the insurance payout will cover that.


What Happens if your Car Under Finance was Written Off?


You have a couple of options if your insurer writes off your car. You can accept it and accept the insurance payment or you can challenge the decision.


The first option depends on your insurance policy but will usually involve a settlement figure being offered by the insurer. You can accept that figure or challenge that too.


If you think the settlement figure is not representative of what a direct replacement of your car would cost, you can challenge their figure or make a counter. You do not have to accept their first offer.


If you want to challenge their decision to write your car off, the insurer will have a process for that. Usually that involves a second opinion from an independent assessor which you may have to pay for.


Car write offs and Flamborough auto loans


Having a car written off is not a situation anyone wants to be in but hundreds of Canadians find themselves in every day.


It’s important to know the auto loan and the insurance claim are completely different things. You need to still pay the loan until you get a settlement from the insurer and can repay the loan in full.


Or you could use the settlement to buy a new car and continue paying the loan. Just tell the lender what has happened so they are fully in the picture.


Contact Unique Chrysler for help, advice and competitive Flamborough car finance and leasing.


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