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I have a Toyota 4Runner Limited - V8, 4x4, nav, you name it. During our oh-so-wonderful hail experience last week (I was momentarily knocked our by a softball-sized chunk of the stuff), it received a lot of damage -broken windows, almost every panel dinged, etc.

The insurance company has declared the car a total loss.

Their settlement offer is fair, and leaves about $5k above what we owe.

I would love to buy back the car from the insurance company. I have the time, tools and expertise to fix the cosmetic damage, and it is mechanically perfect. (06, < 100k miles).

I asked the adjuster if we could keep the car, and she said that wasn't an option because we had a loan on the car.

Am I missing something? I've been googling and haven't heard of an insurance company refusing to let the policy holder to buy back the car because it has a lien, especially given that the lien will be paid off by the settlement check. If the salvage value exceeded the difference, I'd be willing to pay the difference up to a certain amount.

The situation is complicated by the fact that I'm currently consulting, which is basically "unemployed" from the point of view of a bank. Getting another car loan at the moment will be difficult.

Suggestions? We live in Texas. The insurer is Infinity Auto.

Update

I found a (very convoluted and silly) solution, and got the insurance company to buy on (ha) to it:

I have to pay off the loan - fortunately we can do that - and get the title in my name. At that point, the insurance will return the car and the settlement check, less the salvage value. That works out to loaning SOMEONE - not sure whom - a bunch of money for a few weeks, but the check we will get back is within a few hundred dollars of the payoff amount.

Thanks everyone for the advice.

  • I don't understand - you want them to pay you the settlement money and let you keep the car? Or you want to buy it back off them (how much for?) – Vicky Apr 18 '16 at 8:10
  • @Vicky I want to buy it back from them. The settlement check is about 5k more than the loan balance. I just want to keep the vehicle (even with a salvage title). I don't know the salvage value. – 3Dave Apr 18 '16 at 12:55
  • Do you have a good relationship with the bank or any bank? I'd contact the or a loan officer and explain the situation. If your payment history is good you can probably sign a note for the loan gap. – Pete B. Apr 18 '16 at 16:35
  • @PeteBelford thanks. See update. Gotta love process-heavy organizations. – 3Dave Apr 25 '16 at 14:32
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    @PeteBelford actually, it'll be entirely paid for. That's one of my chief motivators. Already found sources for the required body parts for cheap. And I'd rather drive something with some dings that I own than "borrow" something shiny from the bank! – 3Dave Apr 25 '16 at 14:54
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It seems like there are a few different things going on here because there are multiple parties involved with different interests.

The car loan almost surely has the car itself as collateral, so, if you stop paying, the bank can claim the car to cover their costs. Since your car is now totaled, however, that collateral is essentially gone and your loan is probably effectively dead already. The bank isn't going let you keep the money against a totaled car. I suspect this is what the adjuster meant when he said you cannot keep the car because of the loan.

The insurance company sounds like they're going to pay the claim, but once they pay on a totaled car, they own it. They have some plan for how they recover partial costs from the wreck. That may or may not allow you (or anyone else) to buy it from them. For example, they might have some bulk sale deal with a salvage company that doesn't allow them to sell back to you, they may have liability issues with selling a wrecked car, etc. Whatever is going on here should be separate from your loan and related to the business model of your insurance company.

If you do have an option to buy the car back, it will almost surely be viewed as a new purchase by the insurances company and your lender, as if you bought a different car in similar condition.

  • Clarification: I am NOT trying to swindle the bank out of it's money, or keep the loan active. My thinking was that I would use the difference between the payoff (direct from insurance company to lien holder) to buy back the vehicle. I realize it would then have a salvage title, and that's fine with me. Aside from broken glass, and a bunch of dings all over the place, the vehicle is fine. I really don't want to get another multi-kilobuck loan if we could buy back this one. – 3Dave Apr 18 '16 at 14:36
  • I didn't think you were trying to swindle them. Just commenting on how this transaction looks from their side. Also mentioning a potential miscommunication between you and adjuster about "keeping" the car as relates to the loan. – user32479 Apr 18 '16 at 14:37
  • Okay, got it. Not sure if it makes a difference, but we haven't signed any paperwork on this yet. – 3Dave Apr 18 '16 at 14:38
  • The only thing to be aware of for the salvage title is that some insurance companies will not provide coverage for it. Be in contact with your insurance co to ensure they will continue coverage or if they will have increased premiums or reduced coverage. Also, there would be more headache trying to re-sell the vehicle later, but it sounds like that is not in the plans, so no problem there. – Shorlan Jul 12 '18 at 19:21

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