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I Totaled My Car And Still Owe Money On It. What Are My Options?

If your car has been totaled in an accident, your first concern is to make sure that everyone in the car is okay. However, your next concern might be the fate of your car.

If you still owe thousands of dollars on a vehicle that you’ve totaled, you might be stuck with a loan payment for a vehicle you don’t have anymore. Unless you planned ahead with thorough car insurance, including GAP insurance, chances are you will still be on the hook for the amount you owe to the lender.

The car insurance company will pay you the actual cash value of your vehicle before the accident, minus your deduction. However, they may undervalue your vehicle and there’s a good chance the actual cash value of your car is less than the total loan amount.

Cars begin depreciating the second you drive them off the lot. Even new cars can lose a major portion of their value within a couple of years. That’s why totaling your car when you still owe money on it is such a financial blow.

However, you have some options for trying to minimize your losses and recoup some funds. You can try to maximize the funds you earn from selling your damaged vehicle. After you make the sale, you can put some of the funds towards paying off your outstanding balance.

Keep Your Car When Your Insurance Declares It A Loss

When your insurance declares your car a total loss, you don’t necessarily need to hand over the keys and shrug your shoulders. If you opt to keep your car, you might be able to sell it for a better price than the insurance company expected to.

When insurance companies label vehicles a total loss, they ship them off to salvage auctions and then sell the vehicles for a small profit. However, you have the option of keeping the vehicle and selling it yourself.

If you do this, the car insurance company will subtract both your deductible and the amount they expected to profit off the vehicle at auction from your check for the actual cash value of your car. However, the smaller check may be outweighed by the better payment you can obtain trying to sell your damaged car yourself.

Because insurance companies do not specialize in auctioning off vehicles, they may not necessarily get the best price possible for the car. You can shop around and contact local junk yards, salvage yards or private buyers to find out what you can get for your vehicle.


Our expert evaluators can help you get an accurate estimate for your car's value, FAST!

Where Can You Sell Your Totaled Car?

If you’re ready to sell your totaled car, you have a few options. You can try to sell it privately, part it out, sell it to salvage yards or sell it to an online service like CarBrain. The best option for you depends on your know-how and available time.

Parting out your car might yield you more overall, with a caveat. In order for this method to be successful, you should be able to sell the large majority of the parts in your car. That requires disassembling the vehicle, finding buyers and then completing the sale for each part. Depending on where you live and what car you own, that can take months to complete.

Selling it privately to an individual is another option. You could try to find a buyer who will take your wrecked vehicle for a fair price. However, keep in mind that the majority of individual buyers will be hobbyists looking to mine your totaled car for parts or take on a major repair project. They may try to convince you to sell as cheaply as possible in order to minimize their expenses.

You could also sell it to local junkyards and salvage yards. This gives you the opportunity to shop around and see what the best price you can get is. However, it may require contacting a lot of sellers. Additionally, in some cases you’ll be asked to pay for the cost of towing or hit with other surprise fees.

Selling to CarBrain might be the right choice for you. We buy less-than-perfect cars, no matter what condition they’re in.

Why CarBrain Is Right For You

When you use CarBrain, the process is safe, easy and quick. There’s no haggling, no hassle and no hidden fees. All you have to do is get a quote.

If you like the quote we offer, we can help you arrange FREE pickup and FREE title transfer. You can have your car towed in under 48 hours. When the driver arrives, you’ll get a check handed straight to you.

Not quite ready to sell? That’s ok — our offers are guaranteed for seven days. You’ll have time to think it over. Once you’re ready to sell, we can help you schedule your pickup. Selling to CarBrain is fast, secure and simple. Why wait? Click “get an offer” to get started now.

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