Friday, May 18, 2012

Do I have to keep Paying for a Stolen Car?

Years ago the father of a friend passed away unexectedly and his mother returned the father's new car to the dealer. She thought that would stop the payments but she was wrong. Since the "used" value of the car was less than what was still owed, she was billed for the difference.

A similar situation was described recently on FoxBusiness.com, Why You Must Keep up The Payments on a Stolen Car
"Until your car loan is satisfied, you are obligated by the terms of your finance agreement to keep up with your payments, and your insurance policy needs to be kept until the stolen car is no longer registered in your name."
A stolen car claim can take 30 days or more to settle and during that time you're on the hook for all payments. You definitely want to keep the insurance active in the hope that they'll pay for the car loss if it's not recovered or any damages sustained when it is recovered. There may be a gap between the used car price that insurance will pay and what is owed. There are special "gap" insurances policies you can buy to cover this (before the fact of course.)

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