So you’re upside down on your car loan and behind on your payments? Afraid the bank is going to repossess your vehicle? Worried about the economy? Here’s a brilliant idea- torch your car and report it as stolen!
There was an article in the Washington Post this week about the increasing number of car owners who have been caught setting fire to their cars to collect insurance money. According to the folk wisdom of dumb criminals, it’s the perfect crime. After all, a fair number of stolen cars do meet this fate, and car thieves would use the same finessed approach to arson as a desperate owner - gasoline and matches to destroy everything in sight, including evidence of the perpetrator’s identity. Nothing should appear out of the ordinary, right?
Well, it would be the perfect crime but for one simple fact- police officers and insurance adjusters aren’t morons. In fact, for the most part they are quite sophisticated when it comes to detecting dirty, dirty lies. When the human sniff test fails technology picks up the case, as most insurers also using computer algorithms to detect instances of fraud. Every claim is investigated on some level, and if something just doesn’t seem right- even something small- the claim gets flagged and you can expect some serious digging to take place. When they see that you were having trouble making payments, or were seriously upside down on your loan, or were just recently laid off, you can expect the heat to be cranked up even more. You thought the flames from your blazing Camry were intense? Wait until a hired gun starts grilling you on all the wonderful coincidences that led to your car being barbequed just days before the repo man was set to visit.
It shouldn’t come as much of a surprise that those who make bad initial decisions will later try to rectify the problems they have created with even more bad decisions. I have had the pleasure of dealing with quite a number of petty criminals, and the common theme is almost always a stupidity that knows no bounds. The examples cited by the Washington Post are no exception. Take this gem:
“Last year, Alexandria residents Yesenia Gomez and her husband, Jose Reyes, fell behind on payments on their 2007 Dodge Caravan. According to prosecutors, a middle school pal of Gomez’s, Daybin Rodriguez, told Gomez that he’d burned a car in the past and could do so again.
Gomez decreased the minivan policy’s deductible, and a week later the vehicle was found torched in Mason Neck State Park in Lorton, prosecutors said. She and Rodriguez have since entered pleas to destruction of property charges.”
Any vehicle theft is going to be investigated. A vehicle theft and fire a week after the deductible was lowered is going to be scrutinized like a Palestinian boarding an El Al flight. If you’re going to pull a stunt like this, at least be somewhat strategic about it. You’re giving petty criminals everywhere a bad name.
But my favourite example from the article is this one:
“Burdened by debt and driving home from a night of gambling in West Virginia, Sergio Lopez launched a scheme that at the time must have seemed like a good idea.
He pulled his Volkswagen Jetta up to a random corner in Silver Spring, doused the interior with gasoline, set it on fire and walked away. He later made a claim to Nationwide Insurance. The car was missing, he said — someone must have stolen it.”
That’s right- his plan wasn’t to give up playing the ponies, it was to burn his car. I like a night at the tables as much as anyone, but I think it’s safe to say that you should probably look into cutting back just a little bit on the games of chance if you’re at the stage where setting your car on fire seems like a reasoned approach to your financial woes.
It’s a sad statement on our current society that so many people have allowed themselves to get into hole so deep that arson seems like a plausible means of escape. Finding yourself upside down on a vehicle you can’t afford is an unenviable situation, but there is no easy way out. I feel pretty confident in saying that arson is probably one of the worst possible solutions, because you will get caught and things will get much, much worse.
But this does raise a pertinent question- what should you do if you find yourself in this situation? As I see it, there are three real options available- first, you can either increase your income or decrease your expenses so that you can make the payments. This will sometimes be possible, sometimes not. A second option would be to negotiate with the lender and see if alternate arrangements can be made, such as extending payment terms. Some lenders will try to work with you to make it work, others will tell you to stuff your sorries in a sack. The final option is to give up the vehicle, either voluntarily or by waiting for the inevitable repossession. Yes, your credit will be screwed, and yes, you’ll still owe money for the deficiency. But ultimately, it’s preferable to becoming fresh meat at the local prison and being traded for smokes and back rubs. When that’s what you’re facing, I’ll bet the repo man doesn’t look so bad after all.
Until tomorrow, keep the home fires burning…
Photo by E+J Imageries.
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{ 3 comments… read them below or add one }
What happens after the car is gone and the owner found out? Does the insurance company still pay the lienholder, or do they have to go after the owner for what they’re owed?
As I understand it, the finance company has to go directly after the owner for the amount owning, which in most cases will be futile. I know a lot of home insurance policies will cover the mortgagee regardless of the actions of the owner, but I don’t think that this is the case for auto policies. Somebody who knows more about this can correct me, though.
Yeah, I’m sure they’re going to have lots of luck getting $20k from someone who was so desperate they set their car on fire!