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Purchasing a New Car After an Auto Accident in Michigan


Auto accidents can be life-altering experiences that leave lasting impacts in their wake, including the loss of our beloved vehicles. If you live in Michigan and were recently involved in an auto accident, you might be wondering when and how soon afterward it is possible to purchase another one. 

We will explore all factors impacting when and how often this process occurs – providing clarity around this complex topic!

Understanding Michigan’s No-Fault Insurance System

Michigan drivers interested in purchasing a new car after being involved in an auto accident should familiarize themselves with its unique no-fault insurance system to thoroughly comprehend when buying one.

Michigan is among only a select group of states which utilize such an arrangement, meaning each driver’s insurer covers medical bills, lost wages, and damage regardless of fault in an incident.

After an accident, your insurance provider will typically evaluate whether it can be repaired or declared a total loss. If repairs are feasible and cost-effective, your policy might cover expenses associated with returning it to its pre-accident state; otherwise, if damage exceeds certain thresholds (usually around 75% of its actual cash value), they’ll declare it totaled and declare you out-of-pocket for its total value.

Total Loss Settlement

Should your car be determined a total loss by its insurer, they will provide you with a settlement based on its actual cash value (ACV), considering factors like age, mileage, and condition before being involved in an accident. They then subtract your deductible amount before paying you any remaining balance owed.

Timeline of Settlement

After being declared a total loss, your timetable for receiving compensation can depend on various circumstances.

Under Michigan law, insurance companies should begin settlement talks within 30 days after receiving proof of ownership, with completion taking up to 45 days; in more complex evaluation situations or extenuating circumstances, this time may extend further than expected.

Once You Receive Your Settlement

Once your settlement funds are in hand, they’re yours to use however you see fit – including purchasing a car! Should this be something on which your mind rests, several options exist when looking at new models:

  • Are You Planning on Repurchasing or Paying Out in Cash

Once the settlement money has been dispersed, use it as a down payment or pay the entire cost of purchasing your new car in full with cash.

  • Financing

If the settlement doesn’t cover all the costs of purchasing your new car, financing options such as taking out an auto loan from a bank or dealership help bridge any remaining balance.

  • Leasing

Instead of purchasing your next car outright, consider leasing one instead. Leasing allows monthly payments over an agreed-upon timeframe (typically three to five years). Once that period ends, either return it or buy it for yourself.

Factors to Keep in Mind

When setting the timeline for purchasing a new car, several other elements must also be kept in mind:

Research and Test Drives

Conduct extensive research on car models, compare prices, and visit dealerships for test drives. Depending on your preferences and schedule, this process may take days or weeks.


Negotiating the price of a new car can be time-consuming and cumbersome, so it’s wise to shop around, compare offers and secure the optimal offer that meets both your budget and preferences.

Order and Delivery

When purchasing directly from the manufacturer, be aware that delivery may take several weeks. Include this process in your overall timeline when planning for new car purchases.

Acquiring a car following an auto accident in Michigan involves understanding its no-fault insurance system, settlement process, and personal preferences before finding one that matches them all. 

Timelines may differ depending on negotiations for settlement agreements, car availability, and research activities undertaken for personal research projects; with patience, you’re sure to make informed decisions that lead to finding your ideal new ride to get back behind the wheel!

Get Proper Coverage

In case of doubt, keep in mind that it is your no-fault insurance provider who will ultimately pay for your medical bills. As long as you get unlimited or no-limit coverage, you should be properly covered when you need the best coverage for your health and safety.

Contact Your Lawyer Today

If you have an insurance claim that you need assistance with, you should contact us today. A lawyer can help you get started with your claim, and a lawyer at Haque Legal will ensure that your needs are met from the beginning to the end of the proceedings. You are always in good hands with Haque Legal and what it offers.


The article you read is based on general applications of the law. It is not legal advice and should not be construed as any legal consultation with the firm. No client-attorney relationship is created when you read the articles we have provided.

Let us help you out.

If you are having trouble filing an insurance claim, call us immediately. If you have any problem with the law or seek justice and truth, our numbers are standing by to take your call.

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