Auto Insurance Claims: diminished value check, Lien Holder Wants DV Funds

Question
I live in the state of Ga an I have Nationwide Ins. I recently received a diminished value check for a car accident I had in Jan. The check lists my name and Nissan Motor Acceptance Corp for endorsement. I've spoken to Nissan but they won't endorse the check an give it back to me like the finance company I had several years ago endorsed one I was sent an gave me the check to do with what I wanted after an accident a few years ago. I need to pay for my moms cremation with that check but Nissan says no I have to pay it on my principal, I have a 0 percent interest rate on the car. Nationwide says by law the lien holder has to be included on the check but do they have the legal right to make me use it to pay the principal on my loan?

Answer
Denise,

Thank you for your question!

I'm sorry for your Mom's passing;-(

That's a very interesting question and while I'm not an attorney, and can't and don't provide legal advice. I can however tell you what I would do if found in your position.

If you have financed and are purchasing the vehicle, you have a loan contract, and as long as your payments are up to date, even though they have a vested interest in the vehicle, and its value,  I doubt they can simply take YOUR MONEY... and as such...

I would send a certified letter to your lien holder requesting clarification on their position and for them to show you where in your contract with them, it states that you must provide them such payments/proceeds. I would ask for their response to be IN WRITING ONLY and for them to provide you factual copies of all such documentation supporting their position (including copies of the specific contract language). You may wish to get your loan agreement/contract out and read it as well.

If leasing, because they are and will remain the owners, you may have to forfeit the funds... but before doing so I would want a written agreement stating that upon your doing so that they forfeit and relinquish any and all claims they may have against you for diminished value when you turn back the vehicle.

Please; let me know how it goes and what you find out and again...thanks for the question!

Barrett