: If you owe more than the car’s Actual Cash Value (ACV), you are "upside down".
: If you have it, this covers the "gap" between the payout and your loan balance.
Buying a new car after a total loss with bad credit is a multi-step process that involves settling your old debt before securing new financing. Because you are navigating "subprime" territory, your focus should be on proving your current financial stability rather than just your credit score. 1. Immediate Actions for the Totaled Car
: Ask your insurance agent for this document immediately. It is often required by new lenders as proof that your previous loan is being settled by insurance and won't be a double debt.
: Continue your monthly loan payments until the insurance claim is officially settled. Stopping early can cause a delinquency that drops your credit score even further.