In case your car is stolen while you are still paying the loan that you availed for it, you must still continue paying it. However, the process of repayment might change and differ based on whether you have a car insurance or not.
If you have a Car Insurance
In case you have a car insurance at the time of the car theft, the insurance provider will pay you for the loss incurred. You can then pay off the car loan from this payment that you receive. However, the insurance company might take some time or even a few months in some cases to disburse the due amount for losses. In such cases, you should not hold the repayment of the car loan as that would badly affect your credit score.
If you do not have a Car Insurance
In case you do not have a car insurance at the time of the car theft, you must still pay the due outstanding amount of the car loan. Same is the case if your car insurance has expired. You must take care of timely car insurance renewal.
So basically, regardless of whether you have a sufficient insurance cover or not, you are still liable to finish off the dues of the car loan. Owing to this, it is advised to everyone to have a comprehensive car insurance that covers you against any such unexpected eventualities.
Additionally, if there is a difference between the valuation of the car and the outstanding loan amount, it can be covered with the gap insurance. So, if you have a gap insurance at the time of car theft, you are still safe and covered even if the normal insurance doesn’t cover the full amount of the outstanding loan. Understanding how a car loan in India works is very important prior to actually buying one.
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