Refund of some Down Payment when car is totalled

[Allen Muganwa]

Jurisdiction

Illinois

I would please like to know if I stand any chance of getting some of my down payment money back if the car I bought is totaled. The insurance of the other driver who hit my car accepted liability and sent the bank a cheque. Is it fair that I lose the down payment, I basically walked away with zero, I don't have the car and I have to find another downpayment to put into another car. Do I have any legal rights to go to the bank to give me some of my down payment funds back?

 

[army judge]

I would please like to know if I stand any chance of getting some of my down payment money back if the car I bought is totaled. The insurance of the other driver who hit my car accepted liability and sent the bank a cheque. Is it fair that I lose the down payment, I basically walked away with zero, I don't have the car and I have to find another downpayment to put into another car. Do I have any legal rights to go to the bank to give me some of my down payment funds back?

No, the bank owes you nothing.

The driver of the car MIGHT owe you something.

In order to know, you'll have to sue him to seek recovery.

Perhaps you should have carried "underinsured motorist" or "uninsured motorist" coverage, for if you had, you'd have likely been fully reimbursed for your loss.

 

[mightymoose]

Agreed, your down payment was gone the moment you paid it.

The insurance paid the value of the car at the time it was totaled. The value of the car was likely less than what you agreed to pay at the time of sale. If the car had been worth more than what you owed then you would have received a payout. Had you made a larger down payment you may have been owed some money.The insurance company paid the balance due and you no longer owe anything. Consider yourself lucky.

 

[Allen Muganwa]

Agreed, your down payment was gone the moment you paid it.

The insurance paid the value of the car at the time it was totaled. The value of the car was likely less than what you agreed to pay at the time of sale. If the car had been worth more than what you owed then you would have received a payout. Had you made a larger down payment you may have been owed some money.The insurance company paid the balance due and you no longer owe anything. Consider yourself lucky.

Its a hard pill to swallow but I guess I will leave it at that then

 

[Allen Muganwa]

No, the bank owes you nothing.

The driver of the car MIGHT owe you something.

In order to know, you'll have to sue him to seek recovery.

Perhaps you should have carried "underinsured motorist" or "uninsured motorist" coverage, for if you had, you'd have likely been fully reimbursed for your loss.

Thank you for your response

 

[army judge]

Thank you for your response

You're most welcome.

We sometimes are the bearers of bad news.

We are truthful in your responses, and don't take pleasure in bringing you bad news.

The good news, don't save $5.00 on insurance and receive no benefit when you really need it.

I've never met an insurance agent that refused to take time with her/his prospective clients to explain a policy.

Going forward, always make sure you buy insurance coverage that will leave you in an equal position if the worst thing possible happened.

Try to avoid $1,000, $500 or higher deductibles, if you don't keep the cash on hand to pay the deductible.

Always make sure you insure for "underinsured/uninsured motorists", as somewhere between 20-30% of drivers fit that category.

My dad was fond of saying, "Never scrimp on insurance, but don't buy so much insurance that it makes you insurance poor."

 

[zddoodah]

Your spelling of "cheque" and not identifying any state suggests you might not be in the U.S. Please clarify.

Moving on...

I would please like to know if I stand any chance of getting some of my down payment money back if the car I bought is totaled. The insurance of the other driver who hit my car accepted liability and sent the bank a cheque. Is it fair that I lose the down payment, I basically walked away with zero, I don't have the car and I have to find another downpayment to put into another car. Do I have any legal rights to go to the bank to give me some of my down payment funds back?

I'm going to guess that you bought the car for $Z, paid a down payment of $X and financed the balance of $Y (X+Y=Z). You didn't indicate how long after the purchase the accident occurred. However, it seems that the car was only worth $Y, not $Z (either that or this one one of those "the car loses value the moment you drive off the lot" situations). Either way, the other driver's insurer is only obligated to pay the value of the car at the time of the accident (up to the limit of the driver's coverage), and the bank is entitled to be paid before you.

Is that "fair"? You obviously don't think so, and it doesn't really matter what anyone else thinks. Of course, unless the insurer paid out the limits of the driver's policy, you could have tried to get the insurer to pay more instead of accepting a settlement that was limited to the balance of the loan.

 

[adjusterjack]

Perhaps you should have carried "underinsured motorist" or "uninsured motorist" coverage, for if you had, you'd have likely been fully reimbursed for your loss.

Sorry to have to butt in, Judge, but "underinsured motorist" or "uninsured motorist" coverage is for bodily injury to the insured.

Collision coverage is for the car and I suspect that the results would have been the same if OP's own insurance had figured up the Actual Cash Value of the car and paid the lender.

Illinois does have Uninsured Motorists Property Damage coverage available but it, too, would only pay the ACV if the other driver was at fault and uninsured so the same result would likely have occurred.

 

[army judge]

Sorry to have to butt in, Judge, but "underinsured motorist" or "uninsured motorist" coverage is for bodily injury to the insured.

Collision coverage is for the car and I suspect that the results would have been the same if OP's own insurance had figured up the Actual Cash Value of the car and paid the lender.

Illinois does have Uninsured Motorists Property Damage coverage available but it, too, would only pay the ACV if the other driver was at fault and uninsured so the same result would likely have occurred.

No worries, I was simply suggesting that people don't cheat themselves by purchasing potentially inadequate insurance.

In an effort to save a couple bucks, some people don't buy underinsured or uninsured coverage.

They also purchase deductibles of $2,000, $2,500 etc... to save a couple more bucks.

The state minimum isn't sufficient for most drivers' needs.