My girlfriend totaled her car and it was leased and she wants to buy it and the insurance company is ok with it. The problem is that the insurance company will cut a check to the dealer and its enough to cover the acv however insurance says if she wants to buy it they are going to deduct money from the check for the car to the dealer and the dealer says they won’t accept a less amount even though she said she would pay the difference. The dealer said that if she did that they would be selling her a salvaged vehicle which they cannot do. The insurance company says she can’t pay extra to them because they need to cut a specific check amount. Is there any way around this?
My take on the situation is slightly different, though I disagree only slightly with my colleague.
Her insurance company owes her a duty of good faith. As such, if she wants the car and the insurance company can help facilitate the transaction they should do so. If she offers to pay directly to the insurance carrier the salvage value she may be able to get the carrier to agree to passing title to her if she signs a hold harmless agreement with the dealership not to hold them liable if anything should happen during operation of it. All parties might not agree to such an arrangement but worth a try.
It is a tough situation and I do not think you are going to be able to proceed as you wish.
When an insurance company declares a vehicle a total loss then they report that to DMV. The owner (which is not your girlfriend the lessee) may decide to keep the car after it is declared a "total". This is called an "owner retention" and the insurance company has the right to deduct the "salvage value" from what they determined was the ACV. The salvage value is what the insurer likely would get if they took title and posession of the vehicle and then sold its parts, etc.
If the owner of a totaled vehicle keeps the car (and the insurance company deducts salvage value from the pay-out) the owner must (rather quickly) put a "salvage title" on the car by filing forms with DMV. It is perfectly legal to register and operate a vehicle with a salvage title (as long as it is in safe condition, obviously).
The important thing about a salvage title is that when selling the car the owner must fully disclose to potential buyers that it has a salvage title.
Technically, I think the lessor/dealer has discretion about the owner retention and there are a multitude of reasons I can think of why a dealer does not want to retain a car and put a salvage title on it. Based on your facts, my legally considered opinion is that I do not see anyone doing anything contrary to law and I do not believe your GF has legal rights to control how this plays out. Good luck!
Any advice or counsel included in my response is provided as a community service only. No attorney-client relationship is formed, nor is there any representation such relationship will be formed, because I provide this community service. Further, any response, advice, or counsel I provide is merely my own legally considered opinion. It is the nature of legal opinions that equally brilliant legal minds can and often do differ. I strongly recommend you seek additional competent input rather than taking action based solely on my response. I am not responsible in any way for any consequences arising from your independent decision to rely on my response.
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