What to do about car loan debt after a totaled car without full coverage
When a car is totaled without full coverage, partial insurance policies only pay for the other party's vehicle, leaving the owner stuck with a large remaining loan balance. This creates a situation where borrowers are left owing thousands of dollars on a vehicle they can no longer drive, leading them to question whether they should file for bankruptcy or try to negotiate lower payments.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Filing for bankruptcyDid this help you?
- 2Continuing to pay off the loan until graduationDid this help you?
- 3Stopping payments and waiting to negotiate a settlement or payment plan with collectionsDid this help you?
- 4Refinancing the remaining balance with a cheaper personal loanDid this help you?
- 5relying on rideshares or donating plasma for extra incomeDid this help you?
- 6rolling over the remaining balance into a new car loanDid this help you?
- 7waiting for bodily injury settlement funds to pay off the debtDid this help you?
- 8Getting multiple mechanic opinions or quotesDid this help you?
- 9Calling around specifically to transmission shopsDid this help you?
- 10Taking out a personal loan to cover repair costsDid this help you?
- 11Carpooling while continuing to pay off the vehicle loanDid this help you?
- 12Letting the insurance company handle the payoff and title transfer directly with the lienholder.Did this help you?
- 13Continuing to make regular monthly car payments until the insurance check clears to avoid credit hits.Did this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“I fear I am totally screwed. My 2018 Honda Fit EX-L (I bought it in 2023, it has 115,000 miles) has been going strong and then yesterday the engine light came on and it was telling me I had a transmission system issue.”source ↗
“I still owe $13,300 on my car. I went to the dealership and they understandably could not help me.”source ↗
“I thought about buying a used transmission, but with labor it seems like the lowest I can get it would be $4500. On top of that, who knows if the used part would be quality and I still can’t afford $4500.”source ↗
“The only solution I can think of is somehow carpooling to everything while I continue to pay off an unusable car until it is payed off.”source ↗
“I was under my parents insurance which at the time was Allstate. My lender (carmax) only required that I had insurance didn’t matter if it was partial or full. The partial only paid out the other persons car not mine. And his insurance didn’t give me any thing aswell”source ↗
“At the beginning of the year I was in a car crash that totaled our car. We were already behind on it and the totaled payout was about half of what we owed.”source ↗
“We still have a lot of payments to go (Like $8000). Is it worth it to try and get the payments reduced to a more reasonable level?”source ↗
“The other party's insurance paid 7k towards my car and I still owe 13k.”source ↗
“Is there a legit option to get another car? Or am I going to have to wait until I get my money from bodily injury?”source ↗
“I'm just looking for some advice about what to tell the lender with respect to what happened.”source ↗
“I need to get the title from them to get paid, and to pay the balance in a lump sum once I get the check.”source ↗
“I just don't want to say something that's going to cause me problems with them.”source ↗
Where this came up
People with this problem also raised
- 2How to get out of a car loan on a broken car
- 11How to get out of a high interest car loan
- 3Why am I in collections when automatic payments failed?
- 5How to finance a car when insurance payout isn't enough
- 2Do I have to pay my dead parent's credit card debt?
- 4What to do after a car accident without insurance?