I’m looking to buy back my totaled car from the bank before the insurance company takes possession. I want to make some money off the salvage value. I was recently in an accident, and while my car is considered totaled by the insurance company, it’s still drivable, with the engine and front in good condition. Most of the damage is to the body. I currently have an outstanding loan with the bank of around $5,500, and I’d like to buy the car back for $1,500 and then sell it to a buyer.
The insurance company has informed me that I can’t buy the car back from them due to the bank’s lien on it. However, if I pay off my loan immediately, will the bank then provide me with the title to the vehicle?
The insurance company claims that the car belongs to the bank until the loan is fully repaid, at which point the bank will receive the title and auction the vehicle. But I’m wondering if paying the bank first would entitle me to the title instead of the insurance company.
I want to salvage some value from my car to help fund a new one. I understand the insurance company wants to recover their losses, but I feel I should have the opportunity to maximize the value from my policy. This seems reasonable to me.
It sounds like you’re in a challenging situation, but let’s clarify a few important points.
Understanding the Lien: The bank holds the lien on your car, which means they have a legal claim to the vehicle until the loan is fully paid off. Because of this, they will need to sign off on any transactions related to the car, including selling it or buying it back from the insurance company.
Paying Off the Loan: If you pay off the outstanding loan with the bank, you will likely receive the title to the vehicle. Once you have the title, you are free to sell the car yourself. However, you will want to confirm with your bank that the title will be released promptly after the loan is paid off.
Insurance Company Policies: Since the insurance company has already deemed your car a total loss, they will typically take possession of it unless the lienholder gives permission otherwise. It might be helpful to have a discussion with both your bank and the insurance company to figure out a possible solution. Sometimes, banks can work directly with insurance companies to address the situation.
Selling the Car: If you successfully obtain the title after paying off the loan, you would then be in a position to sell the car. Keep in mind that the salvage value may be lower than anticipated, especially since you mentioned that there’s significant body damage.
Consider Options: Depending on how much you owe on the loan versus the potential sale price of the salvaged car, it may also be worth considering if you are better off letting the insurance company take it and claim any benefits from the policy instead.
Ultimately, clear communication with both your bank and the insurance company is key. It may also be worthwhile to consult with a financial advisor or legal expert to ensure that you’re making the best decision for your situation. Good luck!