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What Happens if You Total Your Car with No Collision Insurance?

totaled-car-no-insurance

“I totaled my car with no collision insurance.” Those are words you never want to have to say. A car accident is a low point in life. There’s a possibility people have been injured and require medical attention. Your vehicle and potentially other cars could be damaged badly, and it might be irreparable. But the worst part is not knowing what to do, especially if you don’t have collision insurance.


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Of course, it’s most important that everyone is healthy and alright. But once you know that everyone is okay, you’re left with a totaled car. What do you do?

Did You Know

CarBrain specializes in evaluating totaled cars and making fair market offers for wrecked vehicles. We have decades of experience buying cars with body damage or other major issues.

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What Does It Mean for a Car to be Totaled?

Your car is damaged extensively. It might still run and drive but there’s obviously some serious issues going on. How do you know if your car is totaled?

Totaled Car Meaning

The term ‘totaled’ refers to an insurance industry term known as ‘total loss’. A car is said to be totaled when the cost to repair it just isn’t feasible. The calculation for totaled is different depending on who is assessing the car.

How to Sell if a Car is Totaled

How to Sell if a Car is TotaledIf you’re dealing with an insurance agency evaluating a totaled car, they’ll say the car is totaled based on the repair costs. For some, they’ll say a car is totaled if the cost to repair it exceeds its value. For example, if your car is worth $10,000 and the cost to fix it back to the way it was exceeds its value, it’s totaled.

For others, a totaled car is a percentage of the repair cost. Every insurer has a calculation they use, but many are around 70 to 80 percent of the car’s value. For a $10,000 car, for example, $7,000 in damage could mean it’s totaled.

However, another kind of insurance you may have that could save you in the case of totaling a car is GAP insurance.

What is Gap Insurance?

Gap insurance is actually an acronym – Guaranteed Auto Protection insurance. But the name ‘gap’ is effective in describing what it’s all about. Essentially, in a total loss car situation, gap insurance covers the gap between how much you owe on your car loan and what your car is worth. That gap is known as negative equity.

What Does Gap Insurance Cover?

Here’s the stitch – gap insurance only covers you against insurable losses. A fire, vandalism, accident, or theft are covered by gap insurance. But for discount insurance policies where acts of God are not covered – that would be a tornado, flood, wind, and the like – you might not be covered for gap insurance.

How Does Gap Insurance Work if Your Car is Totaled?

So, you’ve been in a big accident and your car is totaled. What does Gap insurance cover? If you have car insurance, you’ll get the value between the amount owing to the finance company after your car’s insurance settlement has been paid out. If you have $5,000 negative equity, that’s how much gets paid out. And if your car loan is covered by insurance completely, or you have some money coming back to you, gap insurance pays nothing. Zippo. Zilch.

Will Gap Insurance Cover Totaled Car with No Insurance?

Nope. You see, gap insurance is only in effect IF you have collision or comprehensive insurance coverage. You might wonder why, but it’s because there needs to be an insurance payout, otherwise there’s no difference for gap insurance to pay out.

If that’s the case for you, it could be a doubly bad situation. You’re stuck with a totaled car that you’re still paying for, PLUS you’ve been paying gap insurance and unable to use it.

Totaled My Car No Gap Insurance

How Much is Gap Insurance?

Initially, it looks like a small price to pay. Gap insurance is about 5 percent of the insurance cost for your vehicle. But add it up, and it can cost significantly more than it will ever pay out to you. The good news is that, in most cases, you can apply for a gap insurance refund after total loss. Say you have a 48-month car loan and your car is a total loss after just a year. You can apply for a refund for premiums paid for the remaining 36 months.

Is Gap Insurance Worth It?

It all depends on your circumstance if gap insurance is worth purchasing.

  • If you are putting no money down, or a small down payment, it’s typically worth buying gap insurance, as long as you have current car insurance.
  • If your car loan is nearly the same as your car is worth, gap insurance doesn’t make sense.
  • If your car is worth more than your loan value, it’s no question – don’t bother with gap insurance.
  • If you aren’t planning to keep comprehensive car insurance, there’s no point in buying gap insurance.
  • Like all insurance coverages, you don’t want to be in a position where you have to use it. It’s good to have if you need it. But like all insurances, it makes the insurance company more money, not you.

    But if You Don’t Have Collision Insurance…

    If your car isn’t insured during the collision, the term ‘totaled’ is arbitrary. You’ll have to decide for yourself if your car is worth fixing or not and what you should do with your totaled car. After all, the repair costs are all up to you - no one will be paying to fix your car.

    What’s exponentially worse is that if there were other cars involved in the accident, you could be sued for their repairs or medical expenses! You may not have the money to fix your car after it’s all said and done.

    And if My Totaled Car is Not My Fault?

    Unfortunately, if your car has been totaled and it wasn’t your fault, it doesn’t change much. The uninsured costs are still your responsibility unless you’re able to personally sue the other party. But if you try it, know that you’ll be going against a team of lawyers for the other party’s insurance company. You won’t have an insurance provider to help you, and there’s a very good chance you’ll lose the case. In addition to medical costs and car repairs, you’ll have legal fees to pay too!

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    What if You Have a Car Totaled But Still Drivable?

    If you’ve wrecked your car but it’s still driving without much difficulty, you’re one of the lucky ones! It means that most of the damage was simply cosmetic, even though the repairs would cost too much to be worthwhile. You’ve bought yourself a bit of time so you can make a more informed decision. Plus, your car will still have more value than one that doesn’t drive at all.

    You might decide to keep driving your totaled car for a time. But when you need to get a state inspection, your car probably won’t pass. So, the time you’ve bought won’t last forever.

    Selling a Totaled Car

    Your best bet is to sell your totaled car while you can, driving or not. In that way, you can recoup at least some of its value. You could put it toward your next vehicle, or use the money to pay for damages on the other party’s claim against you.

    Where Can I Sell My Totaled Car?

    If you’ve been searching “totaled value of my car”, you know how frustrating it is to get an accurate price. There’s no real totaled car value calculator available to the public - it’s something the insurance companies keep to themselves. You’re left on your own to find someone to buy your wrecked car from you.

    Where Can I Sell My Totaled Car?

    Junkyards

    You could tow your totaled car to the junkyard and sell it for scrap value. The junkyard will pay you based on how much your car weighs. All they want is the scrap metal it contains. But that means that you won’t get much for it, plus you’ll have to pay to get it towed to the junkyard.

    The good thing is that it’s dealt with quickly. The downside is that you’re virtually giving your car away.

    Private Sale

    Sell to CarBrain

    The odd time, you can find a private buyer looking for a wrecked car like yours. They might fix it up or use it for parts. But you can guarantee that they aren’t looking to give you much money for it.

    If you try to sell your totaled car privately, it could take months to find the right buyer. As well, in the end, you probably won’t get much more for it than the junkyard.

    Sell to CarBrain

    The best option to get a good price for your car and have it dealt with quickly is CarBrain. You can sell your car fast with a simple online process and get a fair offer for it. Simply request an offer from CarBrain, complete with all your vehicle details.

    CarBrain will give you a guaranteed quote. If you like it, accept the offer. You’ll get paid quickly for your vehicle and your car will be picked up from wherever it sits, free of charge. It doesn’t get much easier, does it? Get your offer now to see how much your car is worth.

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