Quote:
Originally Posted by Sample00
if there is a loan outstanding and the vehicle is used as security. YOU MUST pay the loan out. Its a banking requirement. In fact, the cheque from the insurance company will probably be made out to the bank and you.
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Quote:
Originally Posted by 4X4
Not necessarily. Bob, look at the original loan agreement. Is the actual vehicle listed on there as security?
I took out a loan to buy my old truck. My grandmother co-signed as my credit sucked at the time. The truck is not listed as security, but the loan is called an automobile loan.
I'm half assed trying to sell the old beast (I have issues letting things go), so I called the bank to find out the answer to your exact question. It turned out that paying out the loan right now in a lump sum would actually cost me $6 more than just paying it out in payments.
So if I do sell the truck, I wont pay out the loan since I wont save any money. And the bank doesn't care whether I still own the truck since they've got Grossi's* farm as collateral.
*Grossi is swiss for grandma
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I believe I said..if the loan has the vehicle as security, it must be paid out. If it doesn't, then he doesn't need to.