What to do if your car is written off, but not paid off


If your vehicle is involved in an accident, it can be a very stressful time. The health and safety of the people involved in the accident is, of course, the number one priority. After that, the state of your vehicle and the amount of damage incurred is the next thing to worry about. If your car is still under financing with a finance house such as WesBank, it should be covered by comprehensive insurance, which gives you some peace of mind while dealing with the aftermath of the accident and what steps need to be taken.

It is in your best interest to understand all the processes involved following an accident, so you can make informed decisions along the way. These include:

  • Recording the date, time and location of the accident (take photos on your phone, if you can)
  • Noting the make, model and license plate numbers of all the vehicles involved in the accident
  • Collecting the personal details of all the drivers involved in the accident, including their names, ID numbers and vehicle insurance details, if applicable
  • Checking if there were any witnesses to the accident, including passengers in the affected vehicles, and recording their contact details (in case there is a dispute regarding liability)
  • Reporting the accident at a police station to get a case number for insurance purposes
  • Contacting your insurance company to advise them of the accident and submitting an accident report
  • Once you have informed the insurance company, they will be in contact with you to take you through the next steps

If, however, the damage to the car is extensive, with the repairs costing more than the value of your car, or if the vehicle is considered unsafe as a result of the accident, the insurer can instruct that the car be written off.

“If your vehicle is financed and you are still paying it off when it is written off, you need to contact the financing company, such as WesBank, and inform them of the situation and discuss what your options are. Technically, the car is still the property of the financier until your insurance company settles the claim and pays the outstanding financing amount still owing on the vehicle, to them,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

The insurance company will usually be liable to pay the insured amount of the car minus the applicable excess. Where there is outstanding finance, any payment will first be made to cover the outstanding finance amount. This may cover the exact amount or leave a shortfall depending on the insured amount and how much is still owing on the vehicle.

The payout from the insurance company will largely depend on your policy and the excess payment (i.e., the amount you have to pay upfront when you make a claim), the amount you still owe to the finance company if your car is being financed, and the depreciation value on your car due to wear and tear.

Once the payment has been made by the insurance company to the finance company, the written-off car will become the property of the insurance company, irrespective of whether there is an outstanding amount owed to the finance house or not.

“If there is an outstanding amount owed by the customer to WesBank, this should be settled in full immediately. If the customer is not in a position to settle the account, we recommend that the customer enters into a payment arrangement with us, on terms agreed to by both parties depending on the customer’s affordability,” comments Gaoaketse.

“It is important to understand the legalities under these circumstances, so you are aware and informed as to who is responsible for settling the debt. Being involved in a car accident is very stressful – the more you know about what to do after the accident and who to contact, the better off you will be when it comes to sorting out the car with your insurance company and settling any outstanding debt with the financing house.”

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