Help with GAP Payment on Car?

Bentham7246

Ok so I bought a new car last friday from a local dealer on Hire Purchase through the finance company that the garage used - My finance was agreed in respect to the terms which were set out to me at the time. (ie 36 payment of £x amount @ 7% interest)

Anyways on monday the finance company called me to check everything over. On the phone they tried selling me a few extras including life cover, illness cover etc (like they do). The guy on the phone also told me about a GAP payment I could make which basically covers me for any shortfall between the amount I would get for the car through my insurance if it was written off and the balance I owe on the finance. I agreed to this as I thought it would be worthwhile.

He asked me If I had fully comp insurance In which i replied "No, only 3rd party F&T" He said that the GAP policy would only cover me if I had fully comp and asked me to upgrade my insurance policy.

Next day I try to upgrade my policy and find out that I can not upgrade ie I'm stuck with 3rd party until next Oct! I received the confirmation on my agreement to the GAP policy in the post the next day!!

Does the fact that I can not upgrade to fully comp insurance (which is a condition to qualify for this policy) void the agreement?? I know I agreed to the contract over the phone but the salesman would be able to foresee that given the fact I only had 3rd party, I wouldn't be able to fulfil my part of the contract if I couldn't upgrade.

Surely this agreement must be rescinded because I'm going to be paying £180 for this GAP payment but if I need to claim against it I can't! There is no consideration on their behalf, my circumstance has made them unable to fulfil their obligations.

Also, as the agreement (contract) was made over the phone would I have a "Cooling-Off" period as per the Financial Services (distance selling) act?

Am I right in saying that this GAP payment I agreed over the phone forms a separate contract to the HP agreement I made at the garage?

Thank you for you help in advance

CHR15

I find it ridiculous to suggest you CANNOT upgrade to Fully Comp.

Your policy has only just started so you won't lose too much by cancelling the whole thing if the Insurance Company won't play ball.

You simply MUST have Fully Comp insurance for a new car purchase on finance, nothing else will do.

Entering into a finance deal with absolutely no cover for yourself is crazy. What if the car gets written off next week??
You will be paying for a car you no longer own for years to come and have nothing to show for it.

davetrousers

Cancel that policy and start a new one (elsewhewere).

chalkie99

Agree with above, you must be able to upgrade to comprehensive cover. Try calling them back and speak to someone different as there has possibly been a misunderstanding.

BTW, are you sure about the 7% interest rate on the car? Dealers have a nasty habit of disguising the true cost by quoting a flat rate rather than the real APR.

PNPSUKNET

have a look at your finance agreement, you will find that it must be fully comp

Daveyj2009

As above i would make sure you are comprehensively insured then make absolutely sure you have the GAP cover arranged. I bought a car few years ago for £16k on finance and assumed i had GAP cover as i had asked for it but never checked paperwork. Anyhow 2 months later car written off, £3.5k shortfall and was left with no recourse but to pay. It really is not pleasant paying for a car that possibly through no fault of your own you no longer have

PNPSUKNET

more to the point why have a new car on thirdy pty fire and theft.

MrsTinks

Definitely get fully comp! What if for some reason you accidently wrote it off! You wouldn't get a penny towards paying off the agreement - let alone any potential shortfall... I took out the GAP insurance too although I probably didn't need to as I put a pretty sizable deposit down - but I wanted to be sure and it seemed to me a pretty small price to pay for peace of mind

crumlie

can any1 define for me wot the invoice price is?

Is it;

1) The purchase price of the car only

or

2) Total amount payable which includes finance?

CHR15

crumlie wrote: »

can any1 define for me wot the invoice price is?

Could someone translate this in English??

continualdiamond

The best form of gap insurance is shortfall gap, covers the shortfall between what your car insurance pays out and the rest left that you owe the finance company.

Also makes sure your car insurance is fully comp, your the registered keeper and that you financed the car puchase.

I have been looking into gap insurance as pick up my car tomorrow and i always finance them, with my OH being the registered keeper and policy holder insurance wise. Now i was all set to get gap insurance through my finance company who never asked if i was going to be the registered keeper and had i of gone through them we would of put my OH down as the registered keeper tomorrow but then that would of made the gap insurance void.

So luckily i opted not to have that through my finance company and am purchasing it seperately elsewhere. Also they have conditions of the age of a car and how many miles it has done when you purchase it. The ones i have been looking at online with having read the conditions before buying most have stated a cooling off period, ie 14 days to cancel with a full refund given.