What happens if my engine blows but I still owe money?

Will dealerships take a car with a blown engine?

Believe it or not, your car with a blown engine still has worth. Dealerships might take it as a trade-in. Even junkyards might see it as useful scrap.

How to get rid of your car if you still owe money on it?

Selling a vehicle and using the proceeds to pay off the loan in full can help you eliminate the debt without hurting your credit. You might also consider trading in the vehicle and rolling negative equity into a new car loan to avoid credit score damage; however, that can leave you with more debt to repay.

Can I sell my car back to the dealership if I still owe?

Note: If you're selling a car with an active loan, you're still the one responsible for paying it off, so the remaining balance on the loan will likely be subtracted from the price the dealer offers you. So if you owe more than what the dealer offers, you'll need to pay the difference to the lienholder.

Will gap insurance cover a blown engine?

GAP insurance does not apply in the event of engine failure, mechanical malfunctions, owner death, or in cases where extended warranty coverage conflicts.

What happens if your car is totaled but you still owe money on it?

Here's the bad news: if you have a loan or lease out on a totaled car, you're still responsible for paying off the remaining balance. Usually, the insurer pays the lender or leaseholder first and gives you the rest of the settlement money if there's any leftover.

What happens when your car is totaled but still drivable?

Rebuilt/Reconstructed Title: Once a salvage vehicle has been repaired and inspected, the California Department of Motor Vehicles (DMV) will issue a "rebuilt" or "reconstructed" title for the vehicle. Once you obtain this, you can legally drive the vehicle.

Can I give my car back if I still owe?

If you can't afford your car payments, you can give the vehicle back to your car loan lender. This option is called a "voluntary repossession." But just because you surrender the car doesn't mean that the creditor has forgiven the debt or that it has to.

What is the death clause on a car loan?

The loan contract's death clause section will detail how the lender expects the loan to be repaid after the borrower's passing. Typically, the estate must repay the debt or the vehicle will be repossessed, but you may have other options.

Does insurance pay if your engine blows up?

Insurance coverage for a car's engine

Whether the crankshaft or gasket blows up, you can't claim unless you have an add-on cover. The engine protection add-on cover allows you to make a blown head gasket insurance claim, along with various other claims related to the repair of the engine.

Can you finance an engine replacement?

There are several ways to finance an engine. Some car repair shops may offer their own financing options, or you can consider a title loan, credit card, personal loan, or borrowing money from family or friends.

Does a blown engine mean the car is totaled?

Engine or Transmission Damage

The engine and transmission are some of the costliest components to replace on a vehicle, which can result in a totaled designation.

What happens when your engine blows while driving?

If the engine blows while you're driving the car, the engine should immediately lose power or shut down. Your engine temperature might also be maxed out and thick smoke coming out of the exhaust. If somehow the engine is still running, you should immediately park and turn off the car.

How much is a new engine?

So, how much does a new engine cost? In the US, it's $4,000 to $15,000 or more. You can opt for used engines to save money, but they typically have not-so-obvious issues, such as worn-out bearings and gasket leaks. There are other better options, like rebuilt and reconditioned engines.

How to get insurance to pay for car repair?

How can I get rid of a car I still owe money on?

A voluntary surrender allows you to return the vehicle to your lender on your terms, and while it can damage your credit, it won't have as big an impact as a repossession. You'll also be able to avoid certain repossession-related costs, which lenders may choose to add to what you owe.

Is it smart to trade in a car that isn't paid off?

Often, it's best to pay down or pay off your auto loan before selling it or trading it in. The main concern is whether you have positive or negative equity on your loan. With negative equity, you should pay off your auto loan before you trade in your car.

Can I return my car to the dealership if I still owe?

Most of the time, unfortunately, you can't return a financed car. Although there are a few scenarios where it may be possible (more on that below), they are few and far between.

Will a dealership pay off my car loan?

If you're interested in trading in your upside-down car, some dealerships will offer to pay off the loan for you. Sounds too good to be true? It's because it is. While the dealer will pay for this loan upfront, this balance will get added to the loan of the new vehicle.

Does surrendering a car hurt your credit?

Voluntary surrender counts as a derogatory or negative mark and will stay on your credit reports for up to seven years. This stain on your credit reports might prevent you from being approved for new credit and your terms, like interest rates, will likely be higher.

How to get auto loan forgiveness?

Generally, you can apply for hardship relief on the lender's website. You'll need to provide certain information and documentation verifying your situation during the application process. This may include: Loan details like the remaining balance, interest rate or APR and payment history.