totaled my car.... need some help!

[brainless twit]

I haven't posted here in ages but I hope some of the gurus can help me out.

I bought my car during my BK - I had to have one due to my commute, and my options were limited of course. I have now paid 24 consecutive on-time payments on it.

Last night I hit a deer, skidded off the road, and flipped my car. It is definitely a total loss. Thankfully my son and I weren't seriously hurt. I had never heard of gap insurance (for anyone reading this, go get gap insurance NOW if you don't have it) so I'm stuck owing a considerable amount after the insurance payoff.

I have to have another car. There is absolutely no possibility around it. I commute over 100 miles each day and I make the primary income in our house. I can't go buy a $300 junker like I'd love to, because I have to be able to rack up miles like there's no tomorrow and I can't afford to make a million repairs.

I have no idea where to go from here. This is my first accident in 10 years of driving, so I'm not used to this. My credit score is still abysmal because I haven't really done anything besides buying the car (didn't want to rely on credit post-BK any more than I had to). I don't even know if I can get another car loan! I can't afford to continue making the payments on my totaled car AND buy another car, can't get a loan from a bank to pay off the upside-down amount... I feel completely stuck.

Any advice for me? I'm open to any suggestions at this point. I'm trying not to rush but I can't stay home from work much longer, and I can't get there until I have a car.

[ansky0007]

For starters since you had full coverage your policy should have the option for a paid rent a car for atleast 30 days. Check your policy and get a rent a car as soon as possible to get back to work. That will buy you some time till you find a solution for another car.

[brainless twit]

We don't have coverage for rentals. I had to drop it after the BK because our rates skyrocketed. We took ourselves down to the bare minimum required in our state just to get the 6-month premium under $1500. Unfortunately that isn't an option.

[ansky0007]

If you had a loan on the car than you should have had full coverage. You can not lease a car or get a loan without having full coverage for the vehicle since there is a lien on it.. Not sure how you managed to remove the coverage.

[Cali]

I thought everyone knew about gap insurance. It's a requirement in many areas.

How were you able to take your insurance down to min when it was being financed?

[brainless twit]

No, we still had full coverage, just not the optional stuff like gap and rental. I had never even heard of gap coverage until this happened - shows what I know! But on our comp/collision we only had coverage for ACV - no loan payoff. So they are going to pay the NADA book value on the car to the lienholder, leaving me owing about $6000 on the car.

I called my lender and they will not refinance that $6000 into anything reasonable, so I'll have to make my car payments every month for almost 2 years unless I can get another loan to pay them off. In the meantime, I also have to find another car.

Some of my family members think I should buy a brand new car because the incentives might offset the leftovers on the first loan, but I've never purchased a new car in my life and never planned to. I can't see paying that much money for something that will be worth nothing in a year or two!

[CindyLou]

The best way to purchase Gap ins, imo, is when you finance the car...they roll it into the loan. Are you sure you didn't have it? Check with your finance company, not just your insurance company.

[coloradomrg]

The best way to purchase Gap ins, imo, is when you finance the car...they roll it into the loan.

This is true if you aren't paying any more than roughly $300 or so. Most insurance companies will charge you less than $15 a month to add this to your policy. I think we just got it for $8. It all depends on the car.

When you purchase the gap through the lender, it almost always has a clause about paying what the balance would be at the time of loss in relation to the contract. If you ever have late fees, or request an extension to get you through a month, then they can deny part or all of the claim. We learned this the hard way after rolling a car in the winter and being stuck $3000 (thankfully it wasn't more) backwards. Gap would have payed, but we had 2 extensions granted by the lender in 3 years, and they denied the claim because the terms of the loan had changed.

If you purchase through your insurance it is usually 25% more than bluebook that they will pay. So if kbb is 10 and you owe 12,500, you are covered. Just an example. Usually this isn't a big deal if you get the right price and don't roll negative equity from a previous car. Your insurance company doesn't care if you have late fees, or extensions! Obviously we are all on the path to never doing this again, but sometimes it's better to pay a little more for a product that delivers.

OP - The new car is one way to go, but I would definetly try to get with a local credit union and see about a personal loan to cover the deficiency. Keep in mind that with a new car, depreciation is huge. The rebates are nice and help the price to value ratios the banks look for, but once you take that car home, the rebate is instant depreciation. It will be hard to roll that negative equity into a new loan without trading the car in... and if it's a total loss, the insurance will probably not allow that.

If you can get into a $1000 car that lasts you a year (or more hopefully), you'd be able to pay off the other loan and get another car after you've gotten that done.

Is there any way to telecommute for your job? That might help as a short term solution. I have a job that requires that I am in the office everyday, but when my wife or son had medical problems in the past, my boss allowed me to work from home for a week or so. Good luck!

[brainless twit]

No option to telecommute - I'm a psychotherapist so I kind of have to be there in person. Nothing like hearing about everyone else's problems when I'm busy with my own!

There was no gap insurance through the lender; even if we had it, I deferred a payment one month when I had surgery so they probably wouldn't honor it. It seems I'm just in a fine mess. My credit score is horrible (around 530). I really wanted to exist without depending on credit after the BK, but in this situation I wish I would have used more effort rebuilding my credit because now I'm screwed. I guess just a word of warning to others out there - if you're going to finance a car, even if you don't plan to use credit cards any more, you'd better get that score up in case this happens to you.

[brainless twit]

Just thought I would update - I called my bank this morning to ask about a loan. I paid for 2 of my 3 FICO scores - Equifax is 628, which would qualify me for a loan; Transunion is 556, which knocks me out of getting a loan. Guess which one the bank uses?

The Transunion report lists several inaccuracies that are hurting my score. First, they list me 2 months behind on student loan payments, which is not accurate. My loans are in deferment because I'm in school; I don't even make payments until 2010. Also, they list a personal loan that was seriously delinquent. I've never taken out a personal loan in my life. I've written a dispute letter, but I know it will take weeks or months to get this straightened out. In the meantime, my car is gone and my husband is having to beg rides to and from work. So frustrating!

[brainless twit]

Updating again for anyone interested... US Bank will loan to someone with a bankruptcy as long as (1) you have established a good credit history after discharge, (2) your Equifax score is above 600, and (3) you don't have a repossession on your credit report. I have a family member who manages a US Bank branch - didn't even think to talk to her - and she said she can approve me without an override because my Equifax is over 600. Actually, it should be more than 628 now that the insurance company paid down the balance on my existing car loan.

I won't have any terms or exact info until Monday, but I am finally breathing now that I know I can get a loan approved. It helps to have family in a position to help, but in this case she isn't even doing me a favor because I meet the criteria required by the bank. Hopefully I'll get a decent interest rate (anything is better than what I'm paying now) and I'll be able to keep my job because I'll have transportation to get there!

[Nicollette]

Hope everything works out for you. Keep us updated.
Good Luck

[Intoodeep80]

Im glad you are ok after totalling your car!! And Im glad to hear you have options...

However, right now Im leasing a 2008 Jeep Liberty. When that lease is up in 24 months, Im driving my 89 Sundance that I paid cash for when times were better. I do NOT ever want a car payment again. I figure I can drive the Plymouth for a while, banking cash - my bank has this CD that you can put money into every 2 weeks, I think Im going to do that. Then when it gets to a considerable amount, cash it out and pay cash for something.

Having monthly loan payments is what got me into this situation! (bk).

[brainless twit]

I do NOT ever want a car payment again. I figure I can drive the Plymouth for a while, banking cash - my bank has this CD that you can put money into every 2 weeks, I think Im going to do that. Then when it gets to a considerable amount, cash it out and pay cash for something.

Having monthly loan payments is what got me into this situation! (bk).

Our case was a little strange in that we could have avoided the BK if we'd waited another month to file. I finished school and sat unemployed for six months while the bills started piling up. A few days after our 341 I had a job interview and got the job. If that had only happened before our hearing, we could have stopped the process and been okay. Mine is actually the higher income between my husband and me, so our financial situation has improved dramatically in the two years since we filed. We've had a few moments, but in general things have been good. Not having to pay off all that CC debt was just an added bonus, or at least that's how we try to look at it.

Anyway, I wish there was a way to avoid a car payment for me. Maybe in the future. I commute about 100 miles a day round trip, so a clunker isn't my best bet. I have to have something reliable that can handle tons and tons of miles (the one I totaled had 70k miles on it after only 2 years). The miles I drive prevent leasing from being an attractive option. I'm not picky about a certain kind of car or certain features - I'm perfectly able to turn a crank instead of pushing a button for my windows! - but it does have to be something that won't need much work. My husband and I both work day shift and have hefty commutes, so one of us would have to take off work if my car was in the shop. As it is, I wouldn't be making it to work right now if my dad wasn't on vacation for several weeks and letting me use his truck.

We have tried very hard not to rely on credit since our BK. We reaffirmed our house (kind of wish we hadn't, but too late for regrets) and have cars, but that's it other than my student loans. We each have a few CCs that we use every now and then and pay off when the statement comes. I haven't tried very hard to rebuild because I'm not interested in using credit any more than I have to. Hopefully when I'm a little older and my student loans are paid off, we'll be able to open some CDs and put some money back so financing a car is no longer a necessity.

[Intoodeep80]

Three words for you: Geo/Chevy Prizm (1994+).

The driver ed company I used to work for (yes, I teach driver education) used to only use Geo or Chevy Prizms. I clocked over 200,000 miles on that car with only oil changes and tires/brakes. That car, at 313,000 miles didnt burn or leak oil or any other fluids. Plus it was peppy and not hard on the eyes.

Trust me, those cars were put through the ringers- we've had kids drive up over enbankments, gun the gas, slam the brakes, put the trans in park while going 15mph, you name it - those Prizms wont die.