What to do, what to do?


#1

My son-in-law crashed his 2001 Mitsubishi Mirage, for which he has a $3000 loan. He only had liability insurance on it. His brother can fix it for the cost of parts, but they will be about $1000, more if the chassis is broken. What should they do? They are poor.


#2

Here are the options as I see it:

  1. Pay the $1,000 for parts to get it fixed, let the brother do it.
  2. Take it someplace to have it fixed, likely costing far more.
  3. Junk the car, get what little $$ you could for it, purchase another, and roll the $3000 loan into another loan for that one.

Any way you slice it, a whole lot of money will have to be spent if he wants an operable car. How/why did he wreck it? If it was from driving too fast or recklessly, then this should be considered a lesson learned the hard way.


#3

I don’t want to pour salt over it, but… this is why I still have full coverage on both vehicles, even on a 8 yr old s10, it only costs around $10. extra a month!


#4

Before buying body parts (I assume the front end was crunched) the front suspension, subframe, and strut towers should be closely examined for damage. If the subframe is badly bent or the strut towers are tweaked then it may be time to throw in the towel and write the car off because those 2 things will lead to a number of other high priced repairs that a DIYer could not do at home. This starts to fall into frame machine territory.

What does the lien holder of the car have to say about this? I would imagine they would be a bit tense knowing their collateral has been whacked pretty hard and no full coverage insurance on it.


#5

How did he get a car loan that did not require collision insurance? I hope he didn’t put it on a credit card.

Well, too late to worry about that I guess. If the car is fixable for $1000 or $1500, I’d probably fix it. Any more than that and I’d junk it and find a $2000 used clunker to get by with until finances improve. It’s hard to find a reliable used car under $2000, though he might find an older gas guzzler for cheap right about now due to gas prices. Without knowing if, or how far, he needs to commute for work it’s hard to say if a large gas guzzler might work out. Long commute would argue against it, but doing the math will show that $1000 buys a lot of gasoline, even at $4/gal.


#6

Thanks to you all for your suggestions! I will pass them along. I don’t know how in the world they got away without full coverage. I don’t think they can really get rid of it since the bank holds the title and as ok4450 said, they may get “a bit tense” knowing that their collateral is in pretty bad shape. I hope this helps them decide. Thanks again.


#7

Holy cow. The bank has no reason to be tense. They carry insurance for cars that the collision was dropped and they will tack that onto the loan no problem at very very steep rates going back to when the insurance was dropped. The best you do is don’t say a word and fix the dang thing pronto.

Sheeseh, just read the fine print on any car loan document and it is very clear that that’s what is done if you don’t maintain insurance. Nothing like adding another $3-4000 insurance bill on top of a $3000 car loan.

Loan them the money or make it a give but fix the thing to specs silently. Then go add the collision coverage for heaven’s sake.


#8

I haven’t owed a thing on my vehicles in YEARS. However, I still keep full coverage on both. People think I’m nuts for covering a 97 Taurus worth $2500 and a 98 Camry worth $4300. But it doesn’t even cost much over $10 extra a month combined. It’s actually (believe it or not) $13 every 6 months on the Taurus and $60 every 6 months on the Camry ($2.16 and $10 a month respectively). All of my insurance cost is wrapped up in high amounts of liability coverage (safe drivers, just keeping ourselves covered). I figure those are prices you can’t refuse…


#9

That’s a tough spot to be in considering the car has a lien on it. As far as I know every insurance company usually sends a notice to the lien holder if a policy is changed or dropped. Same thing with homes. Drop the insurance and see how quickly the bank will be on you.
The bad part at this point is that right now the car is worthless and if the bank gets it as-is they would simply dump it for 25 bucks to a local yard and then go after your son-in-law for a deficiency judgement.

At this point I would keep it quiet, continue the payments, and as I mentioned - inspect the strut towers and subframe. Everything else is pretty much a bolt on deal. What you’re looking for on the subframe and strut towers are obvious bends and paint cracking/wrinkling.
If that appears fine then with some footwork one may be able to find a complete parts car with a trashed motor or transmission on the cheap.
Maybe if you have a pull-a-part type yard in your area you can often buy the entire car for a few hundred bucks at most. Most pull-a-part facilities have straight cars body-wise and the cars there are usually ones that the owners have decided just to throw the towel in rather than repair a major engine or transmission problem.
(A good reason not to trust an engine/trans from a PAP facility.)

Check on eBay Motors in the “parts car” category and you may find a cheap parts donor there. I saw a few listings on there but did not take a look at them to see if they’re applicable or in your area.
Craigslist is another potential source; look under auto parts in your area and see what surfaces.

Tough situation to be in. Hope some of that helps and good luck.


#10

If not driving is an option, I would recommend it. It is the only way sometimes. Driving an ugly car is the next best option. Option number three involves the money from a relative deal. Someone will have to check for the “broken chassis” before doing the other work.


#11

I doubt they’d roll the loan. The total loan value would then be higher than the value of the replacement vehicle. They’ll want 100% of the loan value secured by the asset.