r/askcarsales • u/Old-Nectarine-4580 • 1d ago

US Sale Total Loss Neg Equity

Hello. Kinda in a situation. I got into a car accident and totaled my car. My gap coverage expired and now I have a $7000 balance I’m stuck with. Can I roll the negative equity into a new car loan without having a trade in due to the total loss?

2 Upvotes

57% Upvoted

34 comments sorted by

30

u/_Trikku Ex-Sales 1d ago

7000$ balance on an extended loan, lapsed gap, totaled car?

Have you considered a bus pass?

16

u/kriswknight Lincoln GM 1d ago

How did your gap expire? I have never heard of gap being written for a shorter term than the loan.

4

u/Old-Nectarine-4580 1d ago

Because the loan was extended past expiration date

7

u/kriswknight Lincoln GM 1d ago

Right but how long would it have to be extended to still owe $7000?

11

u/gganew Ford General Sales Manager 1d ago

Gap won't cover late payments or fee's either, probably more to this story.

1

u/JRGonzo89 Former Toyota and Scion Sales 1d ago

Yup

1

u/kriswknight Lincoln GM 1d ago

I would think the vehicle would have gotten hooked before it got to that much in late fees and missed payments.

2

u/gganew Ford General Sales Manager 1d ago

Depends on the bank, repo is always a last resort.

Deferred payments aren't covered either. Lets say OP has a 650 payment, deferred six or seven payments over the term and got past due a time or two, with fee's that would be over 7k that GAP wouldn't cover.

-2

u/Old-Nectarine-4580 1d ago

It was extended, not late

10

u/bsizzle_99 Lender Sales 1d ago

Potentially yes. The more you roll the harder it is and obviously makes your new purchase expensive. Maybe target an EV lease or a different big incentive lease.

9

u/WeekendFarmer4240 Vendor 1d ago

If your loan was long enough to extend PAST the gap term... which normally goes to 84+ months... AND youre still 7k under water... son you bought way too much car.

Bikes are cheaper... start there

2

u/tooscoopy Canuck Chrysler Dodge Jeep Ram Sales, Eh? 23h ago

Can it happen? Yeah, with phenomenal credit and the right car/deal.

With poor credit? No. Would need a co-signer, and your situation screams “don’t co-sign with me!” (Mean no offence, just stating the facts).

How did a loan get extended to the point there is 7k owing, just of negative equity, at the principal termination? I just don’t understand how this could happen. Was it a balloon loan with only the first few years on the original term (and gap)?

0

u/Old-Nectarine-4580 23h ago

I honestly have no clue. The payoff is actually $11k but my insurance is covering the difference

0

u/tooscoopy Canuck Chrysler Dodge Jeep Ram Sales, Eh? 23h ago

talk with insurance and argue it. They are saying your car could be replaced for 4 grand? Can it? Go shopping for one and see if you can find one.

Being 7k upsidedown on a loan happens, but not usually this brutal on a write off. I don’t think any drivable car is replaceable for 4k, so figure out what credit they are actually giving for your car and tell them to show you where the replaceable one can be had for that.

I feel like there is more to this and you just don’t understand what is being said… happens, so don’t beat yourself up or anything, but you need to figure it out.

-1

u/Old-Nectarine-4580 22h ago

I know KBB put it around the same ball park

1

u/tooscoopy Canuck Chrysler Dodge Jeep Ram Sales, Eh? 21h ago

Kbb trade in, private sale or what? As I said, go shopping online and find the closest comparables to what you had. If you can buy them for 4k, alright, guess they are correct. But if they are all more, try to get that (if you haven’t already done your release)… best of luck.

1

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u/AutoModerator 1d ago

Thanks for posting, /u/Old-Nectarine-4580! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.

Hello. Kinda in a situation. I got into a car accident and totaled my car. My gap coverage expired and now I have a $7000 balance I’m stuck with. Can I roll the negative equity into a new car loan without having a trade in due to the total loss?

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0

u/JRGonzo89 Former Toyota and Scion Sales 1d ago

Gap doesn’t expire, you were in breach of your policy by either not making payments or being behind on your payments .

1

u/Old-Nectarine-4580 23h ago

Well…the people that worked at my gap insurance says it expired

2

u/ryangilliss Retired Dealer 22h ago

GAP coverage mirrors the term of the loan. Did you refinance by any chance?

-3

u/DavefromCA Former Sales 1d ago

Google search will reveal tons of info, do some homework and come back to us with questions. What we do need to know is the status of your credit.

2

u/Old-Nectarine-4580 1d ago

I looked online and there are answers all over the place. My credit is not the greatest

0

u/DavefromCA Former Sales 1d ago

We need a number

0

u/Old-Nectarine-4580 1d ago

550

5

u/DavefromCA Former Sales 1d ago

Ya that is going to be an issue. You are deep into subprime borrowing and the banks consider you a "poor" borrower. Why is the score so low?

The negative equity you might be able to roll into some sort of EV lease, but I do not think that is going to fly with the bad credit. If I were in your shoes, Id start looking for EV lease deals on the cheapest ones you can find, and then make appointments with sales people to see what they can do. Let them know up front the situation.

1

u/Old-Nectarine-4580 1d ago

Why a EV Lease?

5

u/iLukeJoseph 1d ago edited 1d ago

I feel like there may be some confusion here. Or maybe I am the one confused. Do you still have the vehicle? If I am reading correctly, you probably don’t. You didn’t have gap, and have a 7k balance with the lending bank. That’s not negative equity, that’s an unsecured debt.

If that’s correct, maybe an F&I manager can answer. But can they use this balance, with no asset attached, and apply it to a new auto loan?

And they are saying an EV lease because most EV’s lease really well. Rebates, dealer discounts, high residuals and/or low money factors. You need the rebates/discounts to “absorb” the negative. And then of course want a low enough base payment so the 7k added on top is manageable. The challenge is if your 550 is accurate, it would be very hard to get a lease approved, or if so, the MF would be at the max, possibly killing the deal.

4

u/Twee4 1d ago

You need excellent credit to roll negative equity up to %125 of the new car value. Good credit %115. 550 lucky to get a loan without a big chunk of money down. Unlikely to be able to buy a car until OP comes up with $8k plus.

1

u/3RDLEGMCGILL 1d ago

I was thinking the exact same thing.

1

u/Old-Nectarine-4580 1d ago

I did have gap but it expired because the loan was extended past the expiration date so it was no longer valid

5

u/iLukeJoseph 1d ago

That wasn’t the question. Since it was totaled, insurance has it now correct? So you’re essentially asking if you can roll in 7k of unsecured debt into a new auto loan?

0

u/DavefromCA Former Sales 1d ago

Ahh ya you are totally right....