A few months ago my brother bought a car. He put some money down ($4000) and financed the rest. He got insurance through progressive, registered it, etc. and drove off the lot with it. A few days later he ended up getting in an accident and hit two parked cars. Progressive said his car and the two cars he hit are totaled. At the same time the dealership is contacting him saying that the financing never went through as when they contacted his employer his employer said he had been let go (he works an on call job and at the time didn’t know he had been laid off.) they are saying this is fraud and now the loan, registration etc are void because it’s technically the dealers car. However, they won’t give us any proof that they have returned the plates that were initially registered in my brothers name. On top of that, despite progressive totaling the cars they are saying my brother owes them money for months that the car was totaled before we were able to cancel the insurance. Shouldn’t the insurance automatically have stopped once the car was totaled? On top of that, is my brother liable for any of the money for repairs etc since the dealership is saying it’s technically their car. This feels very confusing as he registered and insured the car and then drove it off the lot but now they’re saying it was not a valid purchase.
Location: NYC
Comments
Did progressive pay for the vehicle after it was totaled?
NAL.
I’ll start with the insurance. He still owes for the insurance because even though his car was totaled, he still had insurance coverage for if he borrowed a friend’s car, rented a car, etc. He’ll owe up to the point he cancelled it.
For the dealership, normally if a loan doesn’t go through you get another loan or unwind the sale-car goes back to the dealer, brother gets his $4k back. With the car totaled, that can’t happen. He’d owe the insurance payout to the dealer, and would likely be on the hook for the difference in value between the payout and the car value (unless he also had gap insurance, which would cover that). There’s the added wrinkle that he misrepresented, albeit unintentionally, his employment status. His best bet is to work with the dealership to make them whole, because it may well get messy otherwise.