What to Do When Your Car Is Totaled, and You Still Owe Money in Colorado? 2024

What to Do When

Car accidents can happen unexpectedly from countless possible causes. These incidents are a leading cause of accidental injury and property damage in the United States each year, and every car accident victim will face unique challenges as they seek compensation for their damages. If you or a loved one recently experienced a car accident and your vehicle is estimated to be a total loss, this can be incredibly frustrating and distressing, especially if you still owe money on the vehicle.

The total loss of a financed vehicle should not negatively impact your credit if you did not cause the accident, and you have the right to seek accountability and compensation for the damages inflicted by another driver. An experienced car accident law firm is an invaluable asset in this situation. You may have grounds to seek more compensation than you realize, and an attorney can help identify every avenue of recovery available to you.

Claiming Compensation for a Car Accident

Under Colorado law, the driver responsible for your recent accident is liable for all resulting damages. If your car was damaged, this means they are liable for repair costs. However, if the cost of repairing your vehicle equals more than the vehicle’s actual cash value, the car is considered totaled, even if you still owe money on the vehicle’s financing.

Drivers sometimes have the option of purchasing gap insurance when they finance their vehicles. This insurance effectively fills the gap between what can be recovered after an accident and what the driver still owes on the financed vehicle. Though not required, it is important for any driver who decides to finance a vehicle to evaluate whether this gap insurance could help in the future, as it may be difficult to secure compensation for the outstanding balance on a totaled vehicle if the amount owed equals more than the actual cash value of the vehicle at the time of the accident.

Colorado law requires drivers to have auto insurance that covers bodily injury and property damage, but the at-fault driver’s policy may not have enough property damage liability coverage to cover the full value of your vehicle if it was totaled. Your attorney can help prove that the vehicle is a total loss and secure as much compensation as possible from the at-fault driver’s insurance. If you still owe money on the vehicle and previously purchased gap insurance, this may cover the difference. If not, your attorney can advise you as to your most viable recovery options. This may include arguing for a greater estimation of the vehicle’s value and seeking additional compensation from the defendant.


Q: What Is the Law Regarding a Total Loss Vehicle?

A: The total loss threshold for a damaged vehicle is 100%. This means that if the cost of returning the vehicle to a drivable condition added to the salvage value of the vehicle equals more than 100% of the vehicle’s actual cash value, the vehicle is a total loss for the owner. Your attorney can assist you in ensuring a fair evaluation of your vehicle’s actual cash value so that if another driver caused your accident and totaled your vehicle, you can hold them accountable.

Q: Can I Keep My Totaled Car?

A: Yes, it is legal for you to keep your totaled vehicle in Colorado. However, you cannot drive it again until you have it fully repaired to a drivable condition. If the vehicle has sentimental value, the owner may be willing to invest in these repairs, but they will probably exceed the actual value of the vehicle. Additionally, you must secure a Rebuilt Title Established by Salvage certificate before the vehicle can be insured and driven again. This is a very expensive process, but ultimately it is a personal decision whether to keep a totaled vehicle and try to have it restored or to offload the vehicle as salvage.

Q: How Do I Recover Compensation for a Totaled Vehicle?

A: Under Colorado law, if another driver is responsible for totaling your vehicle, you have the right to hold them accountable for all associated economic damages. This could mean the actual cash value of the vehicle, but if you still owe money on the vehicle, you can hold them accountable for this remainder as well. Ultimately, you could be entitled to claim more than you initially expect for your recent accident, so it is important to consult an experienced attorney if you want to maximize your recovery.

Q: How Does a Totaled Car Affect My Credit?

A: Your credit score isn’t typically influenced by your driving record or accidents, only by your ability to repay debts. Even if your financed vehicle was totaled, this should not negatively impact your credit score. An experienced attorney can help recover compensation for the value of your vehicle and hold the at-fault driver accountable for the remainder you had yet to pay off in certain situations. A totaled vehicle would only affect your credit if you totaled the car yourself and failed to repay the remainder of the balance owed.

Q: Do I Need to Hire a Lawyer After a Car Accident?

A: You are not legally obligated to hire legal counsel after a car accident, but you have a much better chance of reaching a positive outcome for your recovery efforts when you have trustworthy legal counsel on your side. Your attorney can make every aspect of your recovery efforts easier, from ensuring fair treatment during the insurance claim process to building a personal injury case against the at-fault driver.

Any car accident has the potential to generate complex and frustrating economic issues for the injured driver. If you find yourself in this situation and are struggling to determine how to resolve an accident with your financed vehicle, the Law Firm of Jeremy Rosenthal can help. Our team excels at handling complicated car accident cases, and we have helped many past clients overcome cases like yours. Contact us today to schedule a free consultation with our team to learn about the legal services we provide to Colorado car accident victims.

Office Location

  • Denver
  • Arvada
  • Aurora
  • Boulder
  • Brighton
  • Colorado Springs
  • Lakewood
  • Westminster
  • Wheat Ridge

Put my knowledge and expertise to work for you. Contact my office today to discuss your case in a free consultation.