Over MSRP and insurance question...

[pfd799]

Question is where do you get a loan for an amount over MSRP? Not any banks that I know of would do that.

My guess is you have to come up with the difference in cash, or at the very least prove you have it on hand. Same thing happened when I sold my house in April. Guy paid so far over asking that the bank made him come up with more money down so they wouldn’t be left holding the bag because they didn’t think its worth that much

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[GoTigersGoBronco]

If you have a total loss, the insurance company has an obligation to make you whole. That’s the value of the vehicle when you wrecked it. If I totaled my 4Runner, I would want the ACV, not what I paid for it.

 

[projectbadlands]

This is speaking solely out of my experience. I bought a 2016 Ford Explorer for my family. At the time, I traded in a 2014 Ford Fusion that absolutely lost its value and rolled over $10k into the loan of the Explorer.

A year into making my payments, some drunk guy ran into my parked Explorer and completely demolished it. At this point, I was still making payments on the money I had rolled into the loan and I had not even begun paying off the actual vehicle. In that years time, the explorer also lost value.

My vehicle was declared a total loss and I began the payout process from my insurance. The $10k I rolled into the loan would be the same as ADM as that is an extra cost added on top of the loan. My insurance paid out the market value of the vehicle, regardless of what I owed.

My adjuster looked at other Explorers listed for sale around my area of other Explorers that had similar mileage, age, and condition of my vehicle prior to being totaled. The remaining balance was covered by my GAP coverage up to 25% of the value of the vehicle.

I had a $2,000 balance I was responsible for out of pocket but Ford Motor Credit was able to assist with the rest of the payment. $100/month at 0% interest for the remaining balance until my balance was paid off.

 

[Mattwings]

Although there are many partially correct answers here, most of them contain at least some facet that’s incorrect. I was in the insurance business for 25 years handled hundreds (thousands?) of total losses. Policies vary slightly by state, with case law and precedent along with regulations (every state has separate Departments of Insurance) determining some payment parameters. Typically stated value policies do not determine the payment amount, they limit the amount an insurance company will pay. ACV (actual cash value) is not new minus depreciation, it is the market value (wiling buyer/seller) is for the vehicle. Every policy I have seen has an arbitration clause that sets the process to resolve disputes. If two independent appraisers decide the market value for a vehicle is a certain amount, MSRP has literally nothing to do with the payment amount. Replacement cost policies are tricky, read the details carefully, they can vary and typically only cover a year or two. Just my informed opinion, a lawyer could tell you a lot more, particularly for your particular state.

 

[PSUTE]

We are currently in uncharted territory. If you bought a vehicle 2 years ago, it is worth way more than you paid for it... Not sure the insurance industry has caught up with that...

 

[Mattwings]

We are currently in uncharted territory. If you bought a vehicle 2 years ago, it is worth way more than you paid for it... Not sure the insurance industry has caught up with that...

It has happened a lot over the years, policies generally pay the market (ACV) for the vehicle. The bigger issue right now is determining what that number is. Back when I handled claims, there were often hot modes with ADM very common. For newer vehicles, I had relationships with dealers and would work with them to sell a replacement vehicle at a certain price. The biggest issues were 1. The customer would be upset that they paid x amount and they could now get the same vehicle at y price. 2. They were upset at the balance they still owed (even though they owed that excess amount already) when I replaced the vehicle for less than they paid for the original vehicle.

I also had lots of examples where we paid more to the customer than they had paid, because values had gone up or they got a really good price (I think those were almost all Lexus cars or SUVs that were hot in the 90s).

 

[PaBronco]

Simple solution is to read your car insurance policy.
Each policy is different.

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