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Lucy, Esq.
Lucy, Esq., Attorney
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I purchased a new veh 3 weeks prior to it being totaled out

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I purchased a new veh 3 weeks prior to it being totaled out in an accident that was of no fault of my own.. i rolled over about 6,000 into this auto loan and the market value is most likely going to much less with out this roll over amount.. when i asked about gap insurance the salesman flipped over the finance contract and pointed to the following statement i am writing it just as it is stated on the contract..
Your promise to us
if the veh. is confiscated, damaged , destroyed, stolen, or missing. you agree to pay us all you owe under this contact even if the vehicle is confiscated, damaged, destroyed, stolen or missing. However if the vehicle is a total loss because it is confiscated, damaged , or stolen, you will not be liable for the gap amount. the gap amount is the excess, if any, of (1) the amount you would owe under this contract as of the date of loss if the vehicle were not a total loss and you were to prepay contract in full less any refunds we get for canceling optional insureance, maintenance, service or other contracts.
based on this am i responsible for the amount settled with the insurance companies and the balance owed on the loan..

My name is XXXXX XXXXX I'd be happy to answer your questions today.

What that language says is that the buyer isn't liable for any remaining balance on the sales price after the insurance company pays a total loss. Look at whether the contract where that is printed includes the $6,000 you roll over, or whether it is only for the purchase price of the vehicle. Since the contract doesn't say "any remaining balance on the loan will be forgiven," if the balance from the trade-in is part of a separate contract, they may try to avoid paying that $6,000. But if it's one document that includes the trade-in and the value that was rolled into the new loan, you wouldn't be responsible.

If you have any questions or concerns about what I've written, please reply so that I may address them. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for answering your question. Thank you.
Customer: replied 4 years ago.

the finance contract is same as most i have seen.. new vehicle information listed trade in vehicle listed then federal truth in lending disclosures showing percent rate. finance charge, amount financed total of payments and total sale price..


then payment schedule and amount and start date


then it has the itemization of amount financed portion.


listed as such..


1 cash price 25,168.12


2 total down payment (and it states if negative enter "0" and see line 4H below) then it breaks it down.... gross trade in $, 4,000 (minus) pay off by seller $11363.59 (=) net trade- in $,-7,363.59 (+) cash $ 500.00 but then under 2 on right side it shows 0


3 unpaid balance of cash price (1 minus 2) 25,168.12


4 a- cost of optional credit insurance paid life - N/A Disability -N/A

b-other insurance paid N/a


c - official feespaidtogovernment agencies N/a


d- government taxes paid N/A


e- government license and registration fees. 140.00


f- government certificate of title fees N/A


G- other charges (seller must identify who is paid and describe purpose)

mike bernard chevy warranty 1,689.00

Mike barnard chevy DOC fee 75.00

Government waste tire mgmt 12.50


H-net trade-in payoff to - santander (lien holder) 6,863.59

total other charges and amounts paid to other on your behalf 8,780.09


5- amount financed (3+4) 33,948.21


based on this lay out of charges and credits and the contract statement your promise to us listed in first part of question what would you liability is..



Based on that information, and the clause you quoted in the initial question, you shouldn't be liable for the balance the loan after the insurance company gives you a check for the reasonable market value of the car.
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