Here is an odd scenario:
I bought a used 1998 truck in 2001 for $10,000.
My truck is insured... If it gets totalled, the insurance pays book value -- I think... about $3,500 -- as of today.
But, my 4-year vehicle loan (rule of 78 - bummer!) has another year left to pay off... a balance now of about $4,000.
So, I think I could "redeem" the truck by paying $3,500 - the book value, right??? (IF I had that money laying around... my homestead/wildcard exemption is $18,675 - California system 2... my total assets are less than $10,000...)
IF I could redeem, then it seems the lender loses $500? Right??? Essentially, the future interest I would be paying in the next year...
However, IF the car was totalled today, the insurance would pay the lender (lien-holder) $3,500 -- and then I would have to make up for the loan balance with another $500... yes?
Any comments?
Should I try to scrape up that $3,500 to redeem??? IF so -- how, exactly, does redemption work?
I bought a used 1998 truck in 2001 for $10,000.
My truck is insured... If it gets totalled, the insurance pays book value -- I think... about $3,500 -- as of today.
But, my 4-year vehicle loan (rule of 78 - bummer!) has another year left to pay off... a balance now of about $4,000.
So, I think I could "redeem" the truck by paying $3,500 - the book value, right??? (IF I had that money laying around... my homestead/wildcard exemption is $18,675 - California system 2... my total assets are less than $10,000...)
IF I could redeem, then it seems the lender loses $500? Right??? Essentially, the future interest I would be paying in the next year...
However, IF the car was totalled today, the insurance would pay the lender (lien-holder) $3,500 -- and then I would have to make up for the loan balance with another $500... yes?
Any comments?
Should I try to scrape up that $3,500 to redeem??? IF so -- how, exactly, does redemption work?
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