What happens if you have a title loan and your car is stolen?
Asked by: Mrs. Christa Hodkiewicz MD | Last update: July 7, 2025Score: 4.2/5 (28 votes)
What happens if my car is stolen and I have a loan?
If your financed car is stolen, you will not get your down payment back. You will also need to continue making car payments because you are still obligated for the debt under the loan contract. That contract does not care if you have the car or not, it was for making payments on a loan.
What are two disadvantages of a title loan?
- High interest rates: One of the major downsides is the steep interest rates. ...
- Risk of repossession: If you're unable to repay the loan, the lender has the right to repossess your vehicle. ...
- Short repayment terms: Car title loans generally have short repayment periods, often 15 to 30 days.
Can you file for a lost title if you have a title loan?
Yes, you can get a duplicate title and since the debt has not been paid upon in more than 6 years, they cannot sue you for any recovery, since the statute of limitations in GA for that loan is 6 years from date of last payment.
What happens if you have a title loan and total your car?
If the car is considered a total loss by your insurance company, they will usually pay the lender directly for the remaining balance on your loan. This process is known as ``gap coverage'' if you have it, which covers the difference between what you owe on the loan and the car's actual cash value.
What Happens if the Car I'm Financing Is Stolen? : Personal Finance & Insurance
Is it against the law to sell a car with a title loan?
If you sell the car to a dealership or private buyer, the lender will typically require you to pay off the outstanding loan balance before they release the title to the buyer. This is to ensure that the new owner of the car has clear title to the vehicle and that there are no liens or outstanding debts on the car.
What happens if you total a car that is collateral?
If you borrow money against your car, the car is the collateral. So what happens if your car is totaled and you have a title loan? Most of the time, you'll be on the hook for the balance unless your insurance payout covers the balance.
How can I get out of a title loan without losing my car?
If you're struggling with a title loan, there are several ways to get out of it without losing your car, including paying off the loan with creative strategies, refinancing with a personal or payday alternative loan, or negotiating new terms with the lender.
Does a title loan have to be in your name?
You will not be able to apply for a title loan unless you have a title to a qualifying vehicle in your name. But, you can visit your local Department of Motor Vehicles (DMV) and request a title transfer if the title is not currently in your name.
Can someone steal my car title?
With your vehicle registration in hand, scammers can replicate your car's title and VIN. They can remodel a stolen car to resemble yours and proceed to sell it. When an unsuspecting buyer goes in to register the vehicle, the purchaser will discover that it's already registered to you.
Does an unpaid title loan go on your credit?
Defaulting on a car title loan can have serious consequences, including repossession of your vehicle and damage to your credit score.
Can you have 2 title loans?
You can have two title loans at the same time, but you cannot have two title loans on the same car. If you have more than one qualifying vehicle in your name and have the means to repay an additional title loan, you may qualify for a second title loan.
Is it smart to use my car as collateral for a loan?
The bottom line
Borrowing against your car should always be a last resort. Before you use your car as collateral for a loan, see if a trusted friend or relative is willing to help out. Check your budget to see if you can save up the funds and pay cash instead of taking out a loan.
Do I get money if my car is stolen?
Yes, insurance will cover a stolen car if you carry comprehensive coverage on your policy. If the car is a total loss, which means it is either not found or it is found damaged to the point where it would cost more to repair than to replace, insurance will pay the actual cash value of the vehicle.
What happens if your car is stolen and you still owe money on Reddit?
You'll still owe the remainder of the loan. With theft coverage? If you had GAP insurance, you'll get whatever is owed on the loan. If you didn't have GAP insurance, you'll get the actual cash value of the car, and you'll owe whatever the difference is between what is owed on the loan and the ACV.
How long before a stolen car is written off?
Your time limit will vary depending upon your policy and insurer but often ranges from 21 to 30 days. A clean title is what guarantees the same resale value as before the car was stolen. However, if your car doesn't meet these conditions, it will depreciate, and it may even become a salvage vehicle.
Who holds the title when you have a loan?
A lien is created as soon as you finance a car. In most states that means the lender holds the car's title and is considered the vehicle's legal owner until the loan is paid in full. The lien protects the lender and allows them to repossess the car if the borrower stops making payments.
Does TitleMax keep your title?
Once your application is complete, we'll render a swift lending decision. After approval, you can expect funding as quickly as the same day! You'll keep your car, and your title will be returned when you complete paying back your loan.
What disqualifies an applicant for a title loan?
Again, the main reasons people don't qualify for a car title loan are because the automobile does not have as much value as the amount of money they are asking for, they may not be able to repay the loan, or if the title already has liens placed on it.
What happens if you stop paying a title loan?
If you cannot keep up with your monthly payments and default on your title loan, the title lender can repossess your car, sell it, and use the proceeds from the sale to pay off the remainder of your loan.
Can I junk my car if I have a title loan on it?
You cannot 'junk' or scrap a car with a title loan. You don't own the car when you have a title loan, so it's not yours to scrap. Instead, you must finish paying off the loan, and then you can do what you want with the vehicle when you possess a clear title.
Can I file for a lost title if I have a title loan?
It's important that you replace your car title because it demonstrates ownership of your vehicle. Luckily, you can easily inquire for a lost title even if you currently have a title pawn.
What happens if your car is stolen and you still owe money?
Unless you take out GAP insurance when financing a car, you will have to continue making monthly payments when the vehicle is stolen. However, you will be free to sign a new agreement once you have paid off the remaining balance on your auto loan.
Can you use a car that's not paid off as collateral?
Lenders have different policies, and some may not accept a vehicle that's still being financed as collateral. Others, however, may be willing to settle your outstanding balance and then extend a new loan against the title.
What happens if you lose collateral?
You lose whatever you used for collateral, which the lender will sell to pay the debt. That is the purpose of collateral. It protects the bank or lender of the funds.