If you have a title loan on your car and it gets totaled in an accident, you may be wondering “My car is totaled and I have a title loan, what happens next?”. The answer depends on several factors, including the terms of your loan agreement, your insurance coverage, and the value of your car. In this article, we’ll explore what happens if your car is totaled and you have a title loan, and what steps you can take to protect yourself.
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Can You Get a Title Loan with a Damaged Car?
Yes, you can get a title loan on a damaged car. In fact, many title loan lenders specialize in providing loans to people with damaged or older cars. However, the amount you can borrow may be lower than if your car was in good condition, and the interest rates may be higher.
Title Loan on a Damaged Car
If you have a title loan on a damaged car and your car is totaled in an accident, the lender may require you to repay the loan in full immediately. This is because the lender’s collateral, your car, is no longer available to secure the loan. If you don’t have the funds to repay the loan, you may be at risk of defaulting on the loan.
What Happens If You Wreck a Car You’re Still Paying?

If you wreck a car you’re still paying for, the situation is similar to having a title loan on a damaged car. If you have gap insurance, it may cover the difference between what you owe on the car and what the insurance company pays out for the totaled car. However, if you don’t have gap insurance and the insurance payout doesn’t cover the remaining balance on your car loan, you’ll still owe money to the financial institution that financed your car.
What Happens If You Damage a Financed Car?
If you damage a financed car but it’s not totaled, you’ll need to get it repaired. If you have comprehensive and collision coverage on your car insurance, your insurance company may cover the cost of the repairs, minus your deductible. If you don’t have comprehensive and collision coverage, you’ll need to pay for the repairs out of pocket.
Lien Holder Car Accident
If you have a lien on your car and you’re involved in an accident, the lienholder has a legal right to be paid first from any insurance settlement you receive. This means that the insurance company will pay the lienholder first, and any remaining funds will go to you. If the insurance payout doesn’t cover the full amount you owe on the car loan, you’ll still owe money to the lienholder.
Totaled in an Accident
If your car is totaled in an accident, your insurance company will typically pay you the actual cash value of your car, minus your deductible. The actual cash value is the market value of your car at the time of the accident. If you owe more on your car loan than the actual cash value of your car, you’ll still owe money to the lender.
Protecting Yourself
To protect yourself in case of an accident, make sure you have adequate insurance coverage. Liability coverage is required by law, but it only covers damage to other people’s property and injuries they sustain in an accident you cause. To protect your own car, you’ll need comprehensive collision coverage.
Comprehensive coverage pays for damage to your car from non-collision events, such as theft or vandalism. Collision coverage pays for damage to your car from a collision with another car or object.
Conclusion – What Happens if My Car is Totaled and I Have a Title Loan
In conclusion, if your car is totaled and you have a car title loan, it is important to take immediate action. First, contact your auto insurance agent to file a claim and find out the value of your car. If the amount is not enough to cover the loan payments, you will need to consider other options such as a personal loan to pay off the remaining balance.
Additionally, you will need to remove the lienholder from your car with a lien title to clear the way for any potential sale. It is important to be aware of the statute of limitations in your state in case legal action is necessary. At Champion Cash Title Loans, we understand the stress and confusion that comes with these situations and are here to help guide you through the process.
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