If you were to experience a total loss to the vehicle in an accident, your car insurance company will calculate the vehicle’s Actual Cash Value. The lending bank, which will be listed as a loss payee or lienholder on your policy, will receive the check first, in order to satisfy their financial interests in the vehicle. If the actual cash value of your vehicle is less than the amount you still owe the bank, you will still be financially responsible for the difference. The loan collateral (your car) no longer exists to secure the loan, and so the bank will look to collect the difference in claim payment versus the outstanding loan balance from you, personally. This could be a couple of hundred dollars, a couple of thousand dollars, or the loan balance could even be less than the ACV of your vehicle if you have been paying off the vehicle quickly.