I have been thinking...if you total the car in an accident, the insurance company will only pay you the market value of the car. Unfortunately, if you actually owe more than that as mortgage, you will have to pay the balance immediately and in full.
When you sell a car that is negative equity (the market value is less than the outstanding mortgage owed), the bank will not release the title unless you pay off the balance immediately and in full.
How about cases when you scrap the car early? Will it be like the first situation (the bank have no choice but to give up the title) or the second (the bank can insist you cannot scrap the car). Of course, the final result is that you have to pay off the balance immediately and in full!
Any thoughts?