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Can You Use Your PI Settlement To Buy A Car?

Submitted by rsg on

If you were in a car accident and your car was totaled or deemed a total loss by your insurance company, you will likely need to get a new one. If you need to buy a new car after a car accident, you may be able to use the settlement from the accident to buy a new car. But you may not have to use all the settlement money that you receive to purchase a new car.

Car Accident Settlement and Buying A Car

After a car accident, your insurance agent will go over the damage to your car and decide whether the car is totaled. Totaled doesn’t necessarily mean that the car is destroyed, just that the car would cost more to fix than it’s currently worth.

If the damage is so extensive that the insurance company totals the car, then the cost of a new car may be built into your settlement. That means you may receive enough money to buy a new car in addition to any money that you receive for pain and suffering.

To prove that your car is so damaged it’s not worth fixing you, will need to have photos or videos of your car, an estimate from a body shop showing the cost to fix the vehicle, and evaluations done by your insurance company.

Car Accident Settlement and Buying A Car

You can use the money that you receive from a personal injury claim to buy a new car. However, if the cost of a new car is built into the settlement you should have money left over after you buy a new car. A personal injury attorney can negotiate your settlement to include the money that you would need to buy a new car at market value in addition to any money that you are owed for pain and suffering, medical bills, and other expenses.

However, you need to make sure that the conditions of your settlement are met. Your settlement agreement may state that attorney’s fees, medical bills, or other expenses must be paid first and whatever is left can be used to purchase a new car. The terms of the settlement are very important. You should have a car accident attorney negotiate the settlement on your behalf to make sure that you get the best possible terms.

Buying a New Car With Your Settlement

Once you’ve met the terms of your settlement and you’re sure that you are free to buy a car with the rest of the money you should start to look at cost-effective cars. Deciding what car to get can be overwhelming, but you can use sites like Bumper.com to help you find local cars, compare costs, and figure out what new car is right for you. And once you find a car you like you can get that car’s history to make sure it’s a good buy.

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