car on hp stolen

emm4_2

Hi All,
hopefully I am posting in the right place
I had a car on finance approx 14 months ago.The car was recently stolen and has been found without the wheels and interior and burnt out.I am fully comprenensive,so no problem there.What I am worried about is the insurance paying out.I still owe approx £4,000 to the finance company.I have been told that when the insurance pay out,they might pay it straight to the finance company,which will mean I have no car and still may owe some money on it.I am happy to pay the finance company,but it seems like I will end up with nothing.Does this mean I will have to get another car on finance?Any help would be most appreciated,thank you.
Emma

~Beanie~

I'm assuming that you didn't take out GAP insurance when you got the car? That would have paid the shortfall between what you owe and what your car ins will pay out.

If not then yes, you will still owe the difference and will also need to get another car.

emm4_2

Hi,
thank you for that answer.If the insurance paid me directly,would the finance company let me continue paying for the car and would I be able to use the money to get another car.I would not be defaulting on the agreement as I would continue to pay it,but at least I would be able to get another car reasonably quickly.Would this be a sensible option or is there a better way?

LJDavis

With HP, the finance company have secured the debt against the car. As there is no asset anymore it is riskier for the finance company (as effectively it is an unsecured loan at a low(ish) rate of interest!).

Therefore I believe that they would not - however events like this should be detailed in your agreement with said Finance Company.