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?

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u/Old-Nectarine-4580 1d ago

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

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u/DavefromCA Former Sales 1d ago

We need a number

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u/Old-Nectarine-4580 1d ago

550

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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.

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u/Old-Nectarine-4580 1d ago

Why a EV Lease?

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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.

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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.

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u/3RDLEGMCGILL 1d ago

I was thinking the exact same thing.

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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

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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?

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u/DavefromCA Former Sales 1d ago

Ahh ya you are totally right....