You can buy a new car after a total loss using your payout from the insurance company if the loss was covered. If you purchased new car replacement insurance, your insurer will provide enough money to buy a similar vehicle. Without new car replacement, most insurance policies will only pay a totaled car’s actual cash value, which is usually not enough to purchase a similar car again. In some states, your insurer is required to pay for the sales tax, title fees, and/or registration costs for a new vehicle, too.
How to Get a New Car After a Total Loss
- File an insurance claim for the damaged car, and file a police report if applicable.
Negotiate your totaled car payout with the insurance company.
- Fill out any necessary paperwork, accept the insurer’s settlement, and sign over the car’s title.
- Receive the insurance company’s check for the totaled car’s actual cash value.
- Communicate with your lender or lessor if the car is leased or financed, and file a gap insurance claim if applicable.
- Purchase a new car.
Cars are generally declared a total loss if their value is less than the cost of repairs, though specific laws vary by state. If another driver was responsible for your car being totaled, the loss will be covered by their property damage liability insurance, up to the policy’s limits. Otherwise, you can file a collision claim regardless of fault. And for cars totaled by something besides an accident, such as vandalism, comprehensive insurance will apply.
Finally, if the totaled car was leased or financed, the check will usually go straight to the lender or lessor. You will receive any money that’s left over from the insurer after your balance is paid off. If you owe more than your car is worth and you have gap insurance, it will pay off the remaining balance for you. Otherwise, you will need to continue making payments.
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