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 Posted: Tue Nov 04, 2008 12:34 am Post subject: Lienholder payoff |
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I have a loan through one of those Title Cash places. I borrowed $1200.00 and have made payments totaling $650.00. I was at no fault in the accident and the other drivers ins. company said the car is totaled according to Missouri law and will pay $3600...I want to keep the car b/c it is still drivable and I need a car for work. To buy it back is $750.00...The ins. company offered the lienholder $1600.00 to pay it off so that I will have enough left to fix the car, but they will not budge....although they do not know that the pay off is $3600
My question is....Can the Insurance Company tell the lienholder that $1600 is all they will pay and leave me owing the balance and still keep the car? Also, does the ins. company have to tell them that the payoff is $3600 or is that between me and them?
Sorry this was so long  |
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ncapron
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| Posted: Tue Nov 04, 2008 1:40 am Post subject: |
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well ncapron first off it's not too long, in fact maybe it could've been longer...not sure I'm understanding all of this...
| Quote: | | I borrowed $1200.00 and have made payments totaling $650.00. |
Is this amount in addition to what you owe the lein holder? I was at no fault in the accident and | Quote: | | the other drivers ins. company said the car is totaled according to Missouri law and will pay $3600 |
ok they are saying that is the value of the vehicle right? ... | Quote: | | I want to keep the car b/c it is still drivable and I need a car for work. To buy it back is $750.00 |
Then that would be $2850.oo and you keep the car... | Quote: | | ...The ins. company offered the lienholder $1600.00 to pay it off so that I will have enough left to fix the car, but they will not budge |
well of course they won't why would they take 1600 if you owe 3600...or do you mean you owe 3600 but you are only getting 1600? i'm confused ... please break it down like this....
1/ How much do you owe the lein holder to pay off this car?
2/ Do you owe a pay day loan place ON TOP of what you owe your lein holder? If so how much, and who has the title to this car?
3/How much TOTAL is the insurance company willing to pay? Not counting what they would subtract for the salvage value?
4/Who do you make payments to?
5/Were you injured? If so do you still have a pending bodily injury claim?
| Quote: | | My question is....Can the Insurance Company tell the lienholder that $1600 is all they will pay and leave me owing the balance and still keep the car? |
Yes, no and maybe...it will depend on what the lein holder does... | Quote: | | Also, does the ins. company have to tell them that the payoff is $3600 or is that between me and them? |
See here's where I'm confused...tell who? The leinholder KNOWS what you owe them, no one has to tell them...please explain this better..
Answer these questions and lets see if we can sort this out better...also are you sure they gave you an acurate and fair estimation of the value of your vehicle? If you want I'll run a value, I need year/make/model/options/mileage/prior UNREPAIRED damage...
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Lori
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| Posted: Tue Nov 04, 2008 6:50 am Post subject: |
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Well, this is my understanding
The OPs total loan was of $12,00. He paid back $ 6, 50 and he still owes them $7, 50 (may be including the interest).
The insurer is ready to pay him $3,600 including the outstanding to the lien holder.
However, the OP certainly needs to clarify more.
~Jeremy |
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JeremyHolter
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| Posted: Tue Nov 04, 2008 11:03 am Post subject: |
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but then jeremy where does this come from? | Quote: | | although they do not know that the pay off is $3600 |
| Quote: | | Also, does the ins. company have to tell them that the payoff is $3600 or is that between me and them |
| Quote: | | The ins. company offered the lienholder $1600.00 to pay it off so that I will have enough left to fix the car, but they will not budge. |
I'm sooooooooooooooo 
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Lori
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| Posted: Tue Nov 04, 2008 11:59 am Post subject: |
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Lori, it reads to me as if OP has two separate loans on the one vehicle.
Kind of like a first and second mortgage.
I think he wants to pay off one lienholder, fix the car, then continue to make payments to the other.
How else do you get a $1,200 loan on a car that has a $3,600 pay-off?
| Quote: | | I borrowed $1200.00... |
| Quote: | | ....although they do not know that the pay off is $3600 |
Except that doesn't make sense either.
Unless, it's one of those "Rule of 78s" loans whereby you owe the interest on the loan regardless whether or not you pay it off early.
See THIS LINK.
| Quote: | | Also known as the sum-of-the-digits method, the Rule of 78s is a term used in lending that refers to a method of yearly interest calculation. The name comes from the total number of months' interest that is being calculated in a year (the first month is 1 month's interest, whereas the second month contains 2 months' interest, etc.). This is an accurate interest model only based on the assumption that the borrower pays only the amount due each month. If the borrower pays off the loan early, this method maximizes the amount paid by applying funds to interest before principal. |
It would be nice if OP would clarify his post.
Most buy-here-pay here places or so-called title loan establishments are nothing more than legalized loan sharks.
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GarySpicuzza
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| Posted: Tue Nov 04, 2008 12:04 pm Post subject: |
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| Quote: | | Lori, it reads to me as if OP has two separate loans on the one vehicle. |
That's the way I took it as well Gary...What I think is they owe 3600 at the org. leinholder, but about 600 at a pay day loan place, the ins company is agreeing to pay 1600 and the op keep the car...but wants to know if the 3600 lein holder needs to know about this...that's what I 'think' hopefully they will be back and clarify.
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Lori
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| Posted: Tue Nov 04, 2008 6:53 pm Post subject: Lienholder Payoff |
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I apologize that is so confusing....ok
1. I owe the lienholder (Title Max) $2500.00
2. They are the ones who have the Title. I borrowed $1000.00 in June of this yr and I still owe $2500
3. The car was declared total out by other drivers insurance although it is drivable (1998 Chrysler Twn & Country Mini van..I would say it is in fair cond.
Since I am buying the car back from the ins. company, can the ins. company tell Title Max that they are only paying $1600 so that I can get what is left from the $3600 so that I can fix the car? Also, to buy the car back, does the ins. company have to actually get the title from Title Max to sign over to me?
The reason I am trying to get some of the payoff is to fix the car and I lost my job due to no transportation and I need it to pay my rent, utlilities, etc...Thanks for your input
Does that make more since? |
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ncapron
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| Posted: Tue Nov 04, 2008 10:33 pm Post subject: |
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| Quote: | | can the ins. company tell Title Max that they are only paying $1600 so that I can get what is left from the $3600 so that I can fix the car? |
No.
If you owe $2,500 that will be paid to the leinholder to retire the debt.
You'll get the $1,100 balance.
The insurance company then owns the car and from your post they'll sell their car back to you for $750, the salvage value.
Some of the adjusters will be along shortly to perfect what I said.
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| Posted: Tue Nov 04, 2008 11:24 pm Post subject: Lienholder Payoff |
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Thanks for the input.
I have been researching similar situations on this forum today and if I am understanding it correctly, if I can get the repair shop or adjuster to give an estimate for less than the blue book value minus the salvage value then it does not have to be considered totaled right? |
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ncapron
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| Posted: Wed Nov 05, 2008 12:11 pm Post subject: |
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| Quote: | | If you owe $2,500 that will be paid to the leinholder to retire the debt. |
Gary there is no contractual obligation to pay the lein holder on owner retained vehicles in third party claims...the ins. company does not get this title...it's basically the same as them paying the owner direct for the repairs, without adding the lein holder to the draft, which they would be required to do with 1st party claims, but NOT on 3rd party...
Ncapron, this is state law thing...the company I work for and the state I work in, you would be happy...On owner retain salvage that are claimants we would pay you NOT your lein holder (on owner retained only)....On a claimant owner retained vehicle all they must do is verify you are the owner of the vehicle they have no contact with your lein holders to protect them (3rd party claim)...so you should just be able to request that the draft/payment be made to you..now depending on your state laws, they likely will advise the state so your title will be changed to salvage title, and you'll likely have a hoop or two to jump thru to satisfy the state your vehicle is safe..
At any rate, just ask that the adjuster make full payment to you minus the agreed salvage buy back...if they say they have to put the lein holder on the draft ask them why? and tell them they have no contractual obligation to protect this lein holder...they are not acquiring the salvage so they do not need the title for re-sale...what's the issue? There could be some law in your state that requires this, but I highly doubt it...
What state are you in by the way?
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Lori
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| Posted: Wed Nov 05, 2008 12:12 pm Post subject: |
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| Quote: | | if I can get the repair shop or adjuster to give an estimate for less than the blue book value minus the salvage value then it does not have to be considered totaled right |
yes, except it's not the blue book value...but whatever the acv of your vehicle is...I don't know what this company used to determine that...i do know it likely wasn't the KBB though...
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Lori
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| Posted: Wed Nov 05, 2008 3:20 pm Post subject: |
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I am in Missouri. So if I understand...I am the third party right?
And the title can be changed to a salvage title even though Title Max has possesion of it right now right?
Can someone verify this in the the State of Missouri?
The adjuster is telling me that if he does not pay the lienholder that they can come back and make him pay the money again to them and I don't understand how they could possibly do that...It doesn't make any sense to me!
Thanks again for all the information. |
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ncapron
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| Posted: Wed Nov 05, 2008 4:37 pm Post subject: |
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Hmmmmmmm, I don't think the lienholder cares whether it's a 1st, 2nd, 3rd or other party claim.
The lienholder wants their loan paid. Either in cash now because the car is wrecked or continue making your monthly payment.
Now...and...correct me if I'm wrong...once the auto insurance company has determined the wrecked vehicle is a total loss the option of "fixing" the car is off the table. I don't mean you can't get the car fixed. I mean the insurance company isn't going to authorize repairs to commence and be on the hook for repairs which may, more than likely, exceed the value of the car.
They'll pay the value of the car to the lienholder first, up to the outstanding loan, and the balance of the proceeds to the insured.
Whether he buys the car back from the insurance company as salvage or has his claim reduced by the salvage value and has the vehicle repaired is a separate issue.
He has an outstanding loan of $2,500.
The insurance company isn't going to write the insured a check for $3,600 with a lien on the car....are they? Would they?
Isn't the lienholder first in line to get paid?
And wouldn't the lienholder have a legitment claim against the insurance company for not paying for their loss if the insured didn't make his monthly payment anymore after getting the $3,600 check?
I'm just asking.
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GarySpicuzza
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| Posted: Thu Nov 06, 2008 1:16 am Post subject: |
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SO AM I ! | Quote: | | So if I understand...I am the third party right? |
Correct! | Quote: | | And the title can be changed to a salvage title even though Title Max has possesion of it right now right? |
Yep
| Quote: | | Can someone verify this in the the State of Missouri? |
Well, I've been doing this for over 20 years in Missouri... | Quote: | | The adjuster is telling me that if he does not pay the lienholder that they can come back and make him pay the money again to them and I don't understand how they could possibly do that |
He is mis-informed...this is true with first party claims where there is a contractual obligation to protect the lein holder as a third party they have NO obligation to protect this lein holder...none, zero, naaaaadaaaa.... | Quote: | | It doesn't make any sense to me! |
That's because it's wrong!
| Quote: | | Hmmmmmmm, I don't think the lienholder cares whether it's a 1st, 2nd, 3rd or other party claim |
Well of course they don't care...they don't however have a contract with the person that hit his cars ins. carrier saying they MUST be protected..as an insured does.. | Quote: | | Now...and...correct me if I'm wrong...once the auto insurance company has determined the wrecked vehicle is a total loss the option of "fixing" the car is off the table. I don't mean you can't get the car fixed. I mean the insurance company isn't going to authorize repairs to commence and be on the hook for repairs which may, more than likely, exceed the value of the car. |
Correct in most all cases.. | Quote: | | They'll pay the value of the car to the lienholder first, up to the outstanding loan, and the balance of the proceeds to the insured. |
yes to the INSURED minus their deductible of course...but this guy isn't the insured...if it's an insured, then the lein holder will not allow him to keep or buy back the salvage in most cases (less money for them) I've seen two lein holder allow this...in over 20 years...course if the proceeds of the loss pay the loan off then they couldn't care less...
| Quote: | | Whether he buys the car back from the insurance company as salvage or has his claim reduced by the salvage value and has the vehicle repaired is a separate issue. |
If he's an insured (1st party) yes... | Quote: | He has an outstanding loan of $2,500.
The insurance company isn't going to write the insured a check for $3,600 with a lien on the car....are they? Would they? |
nope not an insured but he's not an insured... | Quote: | | Isn't the lienholder first in line to get paid? |
Not if he's a claimant, and not if they are not obtaining the salvage, (thus taking title)... | Quote: | | And wouldn't the lienholder have a legitment claim against the insurance company for not paying for their loss if the insured didn't make his monthly payment anymore after getting the $3,600 check? |
Absolutely ''if'' it were an insured..if it's an insured, the insuring contract calls for the lein holders protection...therefore if an adjuster made payment (even for a repair) and did not protect that l/h then the l/h can come back to the carrier and MAKE them pay it again to the l/h...I've seen this happen..then of course the ins. company subro's their own insured...Let's say, an insured get's into a wreck, ins. company pays 3k to repair the vehicle to the INSURED only...the insured keeps the money doesn't repair the vehicle the vehicle is later repo'd the l/h will come back to the ins carrier, and say , 'hey we have a claim on this car' ins. company says, we already paid this a year ago, l/h says, 'show us a copy of the draft where we were protected' ut oh, adjuster screwed up did not protect them so they have to now for a second time pay this l/h direct for the damage, and as I said they will subro their insured for this second payment...(although it was totally their fault)...
Claimant, or 3rd party has no such contact with this carrier....the only obligation this carrier has is to protect THEIR insured by paying what he is legally responsible for...ie the damage to our buddy Ncapron's car...they have zero contractual or legal obligation to protect his leinholder. I have paid many many many third party claimants the total loss (less salvage) or the repair to their vehicle...now if we (as the ins. company) are obtaining salvage then I do have to involve the l/h but not to protect them only because I have to have a clean title to sell this car...if they hold title or have a lien on the title then they are protected only as a by-product of me needing a clean, released title...
This adjuster is confusing 1st and 3rd party claims and the obligations he or she has to each...and they are just flat dead wrong...I would insist that this adjuster show me in their policy under the Property Damage liability portion where it says that they have to pay the lein holder...they'll never find it...because it does not exsist...
Another thing, (check this I could be wrong, but I don't think I am) I believe on owner retained salvage vehicles in this state that are over a certain number of years old (I think seven) then reporting them as salvage vehicles to the DMV is optional by the carrier...now that doesn't mean you might not have 'some' obligation with the state I dont' know you'll have to check that with the DMV...
Finally, it is my opinion and my experience that since you are owner retaining this vehicle and this is a third party claim, the carrier can pay you directly and must pay you directly....for this loss...again, ask them to show you (we are the SHOW ME STATE remember) where it says they must pay your lein holder...make them send you a copy... 
| Quote: | | Thanks again for all the information. |
You are welcome, what part of the state are you from? And which company is this?
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Lori
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| Posted: Thu Nov 06, 2008 1:56 am Post subject: |
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I am in Southeast (Sikeston)....WOW! I apologioze for asking again but I want to absolute %100 sure that I have this correct...
So I am the third party because the insurance company is the other driver's insurance right?
And one more thing...I can still keep the car (salvage) without the other driver's ins. co. having the Title in their possesion right?
Because they are telling me that they have to have the Title to sell the car back to me for salvage.
Thanks again  |
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ncapron
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