Worst Case Scenario on Auto

mplsmm

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So not my customer, but a friend of a friend. They are with Farmers Union. He is a younger guy, 20 or so and not living at home. He couldn't swing a new truck so his parents cosigned on it and they are primary on insurance, he is secondary. he got into an accident and the adjuster came out, estimated $3500. When he called to see where check was, it went to the parents. They cashed it, spent it, and said a big F You, we don't like your new girlfriend. So the kid has a truck he is paying on that isn't driveable. What would you advise him to do? Throw the parents under the bus of course, call the adjuster? The finance company? Let the parents feel the wrath? Also for my future knowledge, what if there had been no loan and it was totaled, would he have been screwed?
 
They were primary, so shouldn't the check go to them? I can't imagine the finance company will be too happy if it is undriveable. I doubt the adjuster will care. He cut the check and it was cashed by the insured. His work is done.

Since he needed a co-signer, his credit is obviously trash. While I wouldn't advise it, he could just walk away and say F you to his parents on their credit.
 
Bank usually it's supposed to sign off on the check too. Do you know how it was written?
 
His girlfriend said it was solely made out to the parents. I am not sure he had trash credit, just none yet. He obviously shouldn't have financed so young.
 
New truck - $3500 + deductible in damage.
Save some pennies and fix the truck. Then go get your own insurance.

What NOT to do:
- Ruin your credit over this. You'll pay a LOT more in the long run.
- Burn your parents. They helped you out, but obviously you did something to hurt them already. Don't throw away your parents over $3500. Over a girlfriend, maybe, but not for $3500.
- Don't bother to sue the carrier. They wrote the check to the primary insured. The finance company may have a lawsuit here, the son does not.

Usually, if there is a finance company involved, checks are written as 2 party checks so my guess is the finance company isn't listed as a lienholder and the adjuster didn't bother to check. It is only $3500, not a total, he was probably overwhelmed and wanted to clear the claim quickly.

Have your friend of a friend get a second job, earn $3500 and get his truck fixed. He can probably have it done somewhere for less.

Dan
 
Contact the bank. Tell them. Bank should contact the insurance company and threaten them to reissue the check. Insurance company will reissue and charge the parents.
 
So not my customer, but a friend of a friend. They are with Farmers Union. He is a younger guy, 20 or so and not living at home. He couldn't swing a new truck so his parents cosigned on it and they are primary on insurance, he is secondary. he got into an accident and the adjuster came out, estimated $3500. When he called to see where check was, it went to the parents. They cashed it, spent it, and said a big F You, we don't like your new girlfriend. So the kid has a truck he is paying on that isn't driveable. What would you advise him to do? Throw the parents under the bus of course, call the adjuster? The finance company? Let the parents feel the wrath? Also for my future knowledge, what if there had been no loan and it was totaled, would he have been screwed?

I'm not buying your friend of a friend's story.... Doesn't add up or make sense. and if something doesn't make sense, it isn't true (sorry for the plagiarism, Judge Judy). there's two sides to every story, and you're only hearing one...... I bet the parents have an entirely different story.

a parent willing to co-sign on their kid's loan is not going to turn around and treat their kid like that over a girlfriend they don't like. especially knowing that doing so could screw their own credit up. the kid could bail on the loan, as Vols pointed out, leaving the parents on the hook too.

if his parents were that dumb and irresponsible, they wouldn't have had the credit to begin with to co-sign on the loan.



and as far as the claim.... I agree with DJS. threatening the insurance company will do no good unless a lienholder was added.... the case would be between the finance company and the parents, who co-signed the loan and spent the money.

I'm guessing the one who really dropped the ball here is the finance company, by not demanding to be added as a lienholder. I see this on occasion, but it usually involves "buy here pay here" companies, not banks. they usually know better.
 
I'm not buying your friend of a friend's story.... Doesn't add up or make sense. and if something doesn't make sense, it isn't true (sorry for the plagiarism, Judge Judy). there's two sides to every story, and you're only hearing one...... I bet the parents have an entirely different story.

a parent willing to co-sign on their kid's loan is not going to turn around and treat their kid like that over a girlfriend they don't like. especially knowing that doing so could screw their own credit up. the kid could bail on the loan, as Vols pointed out, leaving the parents on the hook too.

if his parents were that dumb and irresponsible, they wouldn't have had the credit to begin with to co-sign on the loan.

and as far as the claim.... I agree with DJS. threatening the insurance company will do no good unless a lienholder was added.... the case would be between the finance company and the parents, who co-signed the loan and spent the money.

I'm guessing the one who really dropped the ball here is the finance company, by not demanding to be added as a lienholder. I see this on occasion, but it usually involves "buy here pay here" companies, not banks. they usually know better.
Are you really saying bad people/petty people can't have good credit? Do you also believe all good people have good credit with that logic? Insurance companies make mistakes all the time. It wasn't a total loss so for the check not to be made out to leinholder isn't that crazy. I've seen that a million times.

Maybe give Judge Judy a break I think she is messing with your head.
 
The policy was most likely written in the parents name only (which is 99.9% the case b/c that's why they wrote the check like they did.) The lienholder wasn't listed...if they were...the check would have been made out to them too & i wouldn't get cashed without work being guranteed (and most likely made out to the garage.)

I'm sure the insured called their agent & asked to add the car to their policy because they're getting it for the son. Hopefully, the agent made sure the kid was on their as a driver. Most carriers don't allow child/parents as named insureds, so it was just in the parent's name the whole time.

Ultimately, the parent's on are the hook because they co-signed. If the kid says "Screw it" b/c he doesn't have the cash to fix it....it ultimately falls on the parents.

..there is certainly more to the story.
 
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