A total loss is determined when the cost to repair a vehicle outweighs the value of the vehicle. According to the Department of Transportation, millions of Americans are injured yearly in car accidents. Some of those accidents result in total losses of your vehicle. Here is how you can buy a new vehicle after a total loss and fit it into your budget.
Be Sure to File an Insurance Claim
Whether you have full coverage that includes collision or not, you need to file an insurance claim. The insurance claim is a necessary part of the process. The insurance claim will trigger a review by the adjuster, including evaluating the repair costs to the actual cash value (ACV) of the vehicle. You will be notified if the adjuster finds a total loss is warranted. The process can take a few days. You may walk away with some money you can use to sell a new vehicle. Your budget may take a ding if you owe more on the vehicle than the insurance company determines your vehicle is worth.
If you are charged with an accident, you may have more problems than simply finding a new vehicle after a total loss. For example, if you are charged with DUI, you may have to deal with taking classes. According to StreetNews, typical DUI classes are concise and teach drivers about the dangers associated with driving under the influence, but it may still be something you have to deal with. Distracted driving is another charge that may trigger some driving classes you must budget for. According to NSC, about 66% of drivers admit they will make a phone call while driving through a parking area. Of course, replacing your vehicle after a total loss may feel essential, but so is making sure you comply with any of the fallout from the accident.
Buy Back Your Vehicle
After the insurance company determines the total loss, you can repurchase your vehicle from the insurance company. The cost of repurchasing the vehicle is typically meager. This can be a budget-friendly way of ensuring you have something to drive. You will have to pay out of pocket for repairs. In some cases, a total loss has nothing to do with the vehicle’s ability to operate. The damage is strictly cosmetic. If you can live with an ugly vehicle, buying your salvaged vehicle back from the insurance company may be an option.
Downsize Your Vehicle
You may have to make some sacrifices after a total loss, including driving a less expensive vehicle to protect your budget. Downsizing to a less expensive vehicle is essential if you do not get the amount of money from the insurance company you thought you would. For example, if the total loss compensation doesn’t cover what you owe the finance company Even if the car is totaled, you must still pay the finance company. It can be difficult to make payments for two vehicles, especially when it’s for a car you no longer have). Downsizing into a less expensive vehicle can lessen the pinch on your budget.
Remember It’s Possible
It is not impossible to get right into a new vehicle after a total loss, but it does take some effort on your part. As you move forward, make your budget a priority. Know your budget limitations and don’t exceed them. Speak with the finance company after the total loss to inquire about making a payment plan to pay off any debt. You may be able to work out something that fits into your budget better than making a full monthly payment. Learn more tips for purchasing a vehicle after a total loss and protecting your budget.