Car finance - Gap premium

philswain90

Hi,

I have a dispute with motor finance company. My girlfriend is paying off her car and her finance agreement is over 3 years. The last payment should have been March 2009, which would be 36 payments and complete the finance. However they are asking for another monthly payment because the very first payment they took, back in April 2006, was a GAP insurance premium. They notified my girlfriend of this but she called them to cancel the insurance on 14th March 2006, which was well in advance of the payment due date. The first statement they sent her was last month, so only then did she realise that the first payment was for the GAP premium. My girlfriend cancelled the direct debit in March in the belief the finance was paid so now Close are asking for the extra month payment plus a £20 charge!

Following many discussions with them they have been unable to trace the phone call which cancelled the insurance and say she owes the money. Where do i stand with this complaint, i believe we are in the right, my girlfriend certainly cancelled the insurance, its just that they cannot find the proof, even though i can provide the exact date it was cancelled.

Any advice gratefully received. I have written a letter to their head office stating the facts again and stating that if they do not respond i will take the issue to the ombudsman service.

As i say any advice appreciated, even if you don't think i have a chance and will have to cough up!

Thanks.

cyril82

I know this reply is a bit late but i have only just stumbled accross this post.
I have had a similar dispute with Close motor finance where they said my first payment was gap insurance even though i never agreed to it.

Unfortunately if you agree to the insurance policy unconditionally on the phone, (which you should never do but is how they try to sell these gap policies) then that does form a contract which is what they will tell you.

However, you should still demand to see documented proof that a physical policy was in place and thaey hadn't simply Taken your money and not set up the policy.

When i requested my policy documents it took a very suspicious 5 months for them to produce it and my finance agreement was only 14 months old so given that 3 years have passed in your case there may be a chance that they wont be able to produce proof that a policy was in effect.

If they want to charge the extra payment then you have a right to demand proof that the gap policy has been in effect for the term of your policy, if they can not prove that it was then don't pay.