Didn't Switch Newly Bought Car to Insurance and Now Accident

davidcarmichael · 09-03-2009, 07:03 AM

Hi. Long story short, I bought a used car (I'll refer to as 'new' here) 36 days ago from a dealership. They said they would 'take care of everything' like the registration, etc. They took my insurance card as well.

I was driving in the rain and the street was flooded, causing my engine to go out. Now they are saying I'll need a new engine, which will cost $18,000 - and I only paid $12,000 for this car.

I've had insurance with Progressive for over 2 years but they only had my old car on file. I called and they said they will not cover the new car since I didn't call about it before hand. They have a grace period of 30 days but it's 36 days so I don't get anything.

Half the people I've told this about say it's my fault for not calling and I have to pay this out of pocket. The other half say that their dealership made them switch insurance on the spot before they get their car.

Also, I have a registration for the new car from the DMV. Someone told me that it's fraudulent for the dealership to even get that without having my insurance switched to this car and that technically the car should still remain covered under the dealership's insurance.

This is all in Virginia, BTW (though the flooded road was in MD). Do I have a case here at all and should I contact an attorney?

Clint · 09-03-2009, 07:37 AM

David, in Virginia, your insurance would have covered your car for 30 days. For the car to be registered it HAS to have insurance in Virginia. You need to get with the dealership and demand them to show you how it was insured and on whose policy. (theirs perhaps) and how it was registered. Did you have a 90 day temp tag, or a 30 day temp tag? I have never heard of an engine costing 18,000 more around 1500 and another 750 for install....

xrac · 09-03-2009, 07:49 AM

Originally Posted by Clint

......1500 and another 750 for install....

Here in Indiana replacing almost any kind of engine with a used engine will run at least $2,000 total. Rebuilt engines will run closer to $4,000 but those prices are for the run of the mill variety cars. When you get into something exotic or scarce prices can go up. A used engine for a Mitsubishi Montero Limited will run you about $5,000 just for the part if you can find one and by the time you have it installed you would be pushing $7,000.

What kind of car are we talking about? Has anybody drained all the oil water out of the engine? Pulled the spark plugs out and tried cranking it? Does it have bent valves or what?

healthagent · 09-03-2009, 08:01 AM

A new engine is $18,000? What kind of car did you buy, a Ferrari? And driving through water wouldn't have a single thing to do with needing a replacement engine. There's more to this story that's not being told.

I don't know about your state but you cannot drive off the lot in a car from any dealership without temp or hard tags. In order for a dealer to put tags on the car it needs to be covered under the insurance first - which mean the call needs to be made to the insurance company at the dealership.

The dealership cannot change your policy - only you can do that.

SportsNut · 09-03-2009, 08:07 AM

Originally Posted by healthagent

A new engine is $18,000? What kind of car did you buy, a Ferrari?

Originally Posted by davidcarmichael

Now they are saying I'll need a new engine, which will cost $18,000 - and I only paid $12,000 for this car.

I'll take one of those Ferrari's for 12K.... No, make that a half dozen of em.

davidcarmichael · 09-03-2009, 08:21 AM

Originally Posted by Clint

Did you have a 90 day temp tag, or a 30 day temp tag? I have never heard of an engine costing 18,000 more around 1500 and another 750 for install....

I believe they took the plates from my old car (which they bought from me on the spot) and just put them on the new one, so I never had any temp tags. It's a Mercedes but it's almost 10 years old. The repair place said a new engine is $18,000 plus $2,500 for installation.

"Has anybody drained all the oil water out of the engine? Pulled the spark plugs out and tried cranking it? Does it have bent valves or what?"

I don't think anyone's done anything to it. It went through water that was probably above my ankles but when I pushed it out, it definitely didn't go into the car, which had its door wide open when I got out to push it. After I pushed it out of the flooded street it just died - brakes didn't even work and it hit a guard rail but that's smaller damage I'm not even concerned about. They are trying to rob me on this engine thing. I haven't even seen the car since it's up near Baltimore and I went home to VA. For all I know they could be lying about the engine.

"In order for a dealer to put tags on the car it needs to be covered under the insurance first"

Yeah since they just put my old tags on it, does that mean it's still covered under the dealer's insurance? Anyone know any good lawyers in DC/Norther VA/MD who specialize in this to review if there's a case here? Most I see listed are just for auto accidents and not for insurance.

Also sorry for the double post on the forum - I'm new here and the internet connection got stuck. Thanks for all the advice!

healthagent · 09-03-2009, 08:40 AM

It's only covered under the dealer's insurance if they put dealer tags on the car.

The dealer cannot put the old tags on your car. If you would have been pulled over those tags wouldn't have even been registered to your car.

If you want your old tags on your new car it needs to be registered with the MVA but that can only be done when the MVA is provided with proof of insurance.

Some larger dealerships can a link with the MVA, they can issue hard tags on the spot. If that dealership didn't have a link with your MVA there's no way you could have left that lot without temp tags.

xrac · 09-03-2009, 08:50 AM

Depending on the Mercedes a replacement engine could be $18,000. It is possible. The first thing you need to do is get this car to a shop you can trust. Someone should drain the oil, remove the spark plugs, crank it and see if you have actual engine damage or not. The longer it sets with water in it the bigger problems you create if the engine is not damaged.

healthagent · 09-03-2009, 09:01 AM

I'm not even sure it would have mattered if you had insurance at the time. You claimed you drove when the street was flooded. It's likely the insurance carrier would have found that it was your fault and not paid a dime.

I can almost guarantee you that no auto carrier I know of would have coughed up a 12K check 36 days after you bought a used car because you drove it through water.

briko3 · 09-03-2009, 09:33 AM

Ditto what xrac said. It shouldn't need an engine replacement just based on what you're telling us. Get someone that you trust to check for sure. Sounds like they just want to make money off you since you're out of state.

davidcarmichael · 09-03-2009, 09:40 AM

Originally Posted by briko3

It shouldn't need an engine replacement just based on what you're telling us.

I just called them and they said engine is definitely shot. They said that even if it's not that deep, if it gets sucked into the engine it can ruin it. I may not have mentioned it but I did try to drive it in reverse out of the water before I got out to push it, so maybe that's what did it.

healthagent · 09-03-2009, 09:54 AM

I think you just lost 12K.

Markingriffin · 09-03-2009, 10:19 AM

Originally Posted by davidcarmichael

Hi. Long story short, I bought a used car (I'll refer to as 'new' here) 36 days ago from a dealership. They said they would 'take care of everything' like the registration, etc. They took my insurance card as well.

I was driving in the rain and the street was flooded, causing my engine to go out. Now they are saying I'll need a new engine, which will cost $18,000 - and I only paid $12,000 for this car.

I've had insurance with Progressive for over 2 years but they only had my old car on file. I called and they said they will not cover the new car since I didn't call about it before hand. They have a grace period of 30 days but it's 36 days so I don't get anything.

Half the people I've told this about say it's my fault for not calling and I have to pay this out of pocket. The other half say that their dealership made them switch insurance on the spot before they get their car.

Also, I have a registration for the new car from the DMV. Someone told me that it's fraudulent for the dealership to even get that without having my insurance switched to this car and that technically the car should still remain covered under the dealership's insurance.

This is all in Virginia, BTW (though the flooded road was in MD). Do I have a case here at all and should I contact an attorney?

Stop blaming other people for you not taking care of this. Everyone in the world knows when you buy a car, that you call your insurance company and add the new car to your policy. I have bought over 15 cars and never once did I think the dealership would take care of it for me. If you want to sue someone, sue yourself.

At what point was you going to add this car to your ins policy. It was 36 days after a normal person would have add the car to their own policy and you still didnt do it.

The dealership did take care of everything they had to. I bet they took your insurance card. If you had wreck the car in the 1st 30 days, then you car insurance company would have coverage it. The dealer took you card so that in case you wreck the car, while in your testing period or the period when you could have returned the car, that they would have been covered.

I've never heard of someone driving in the rain and the engine stop because of it. That tells me that you drove in water that must have been really deep. Sounds like your fault again. I might be wrong, but if you had car insurance would it covered the engine repairs?? HMM

I'm not a car ins agent, but I do have some common sense on days that end with a "y"

It's all your fault. Just own up to it and stop trying to blame everyone but you.

briko3 · 09-03-2009, 10:40 AM

Get it sent to another shop for a second opinion. Did you expect to call them after they quoted you a $18,000 repair and them tell you that it's fixable all of a sudden?

For that much money, I'd spend the extra $200 or so to get it towed somewhere else if YOUR choosing. Shoot, they might even waive the towing fee if you get it fixed there. Just call some people up there and ask if they can do it or not.

healthagent · 09-03-2009, 11:58 AM

I contacted my auto agent over this question and realize this is state specific. Your state may be different.

When purchasing a new car the dealership is responsible to make sure you have current insurance. After buying the car you have 30 days to add the car to your current policy and it's automatically covered when you drive off the lot.

If you do not add the vehicle within the 30 day period it is now uninsured. No dealership has the authority to contact your auto carrier to add a new vehicle.

On top of that, I ran your story past him; drove in deep water which toasted the engine. Without contacting claims his best guess is that would not have been covered anyway.

LoriRutl · 09-03-2009, 01:24 PM

Ignorance is NOT an excuse. You should have called your insurance to switch the coverage to the new (used) car.

djs · 09-03-2009, 03:56 PM

Hmm, something is wrong here...

I'll speak for California, rules may vary by state.
No problem with the registration. Your car was insured for 30 days. The dealer usually faxes the change to your insurance company, but the insurance company won't do anything unless YOU call them. I do this every day.

There is NO LOSS here for an insurance company to pay. Read your policy. Driving through standing water that is ankle deep does not cause a car to fail. It is not a collision. If it had flooded the interior, it would be a comprehensive claim, but it didn't.

You didn't describe what happened that makes the engine have to be replaced. Ankle deep water makes it hard for me to think it has anything to actually do with the engine, but probably a major electrical problem.

The car was a lemon. Hopefully you bought a warranty with it, the warranty should cover its portion of the repair bill. An insurance company will not pay for repairs to your vehicle for this.

Why would you think this is an insurance issue at all?

Dan

P.S. Your mechanic is ripping you off, unless the car had a bad engine when you bought it.

JustinUpright · 09-03-2009, 03:57 PM

Just hang on to it. Once Obama is done with health ins he is going to fix those greedy car ins companies too. I heard he is going for a GI car insurance as well.

Once he gets that straightened out you will be able to get insurance and fix the old damage.

Markingriffin · 09-03-2009, 04:01 PM

Originally Posted by JustinUpright

Just hang on to it. Once Obama is done with health ins he is going to fix those greedy car ins companies too. I heard he is going for a GI car insurance as well.

Once he gets that straightened out you will be able to get insurance and fix the old damage.

OBAMA = CHANGE,,,

TRUE THAT!!! I HAD SOME MONEY AND NOW I DONT.

I'M SEEING A LOT OF CHANGE ALREADY.

healthagent · 09-03-2009, 06:12 PM

Agreed. I can't imagine any case where driving through standing water would render the engine useless. Back in the old days the distributor would get wet and it would conk out. Not now.

I agree - the car was a lemon. Engine might have had a crack in it which allowed water to get in.

There are no lemon laws for used cars. They are sold "as is." So unless the dealership had some kind of warranty (sometimes 30 days on used cars) again, you're out 12K.