Advice needed(please)

frosty

Hi everyone,my sister was in a four car crash and her car is a write off,the car has finance on it,we were wondering when the insurance offer her a figure do we have the right not to accept the first offer,and does the insurance cheque have to be paid to the finance company,what if the finance owed was say £5,000 and the insurance company only give her £4,000 would she still be liable for the remaining £1,000 and would she still be without a car.

blue_haddock

No you do not have to accept the first offer or any offer on the vehicle from the insurance company however just because she has finance on it doesn't mean they have to cover the outstanding amount.

If they pay her £4000 and she owes £5000 on it then yes she is still liable for the remaining balance and yes she would be without a car, this is why car salesman will try to sell you GAP insurance - it covers the difference between the insurance payout and any remaining finance.

frosty

Thanks blue_haddock,I will see if she has the gap insurance that you mentioned.I have never had a car on finance so I cant give my sister any advice.

*!*HIBS*!*

If you do some research on the same spec of your sister's car (by looking through used car guides online or in books or even car ads etc...), you can go back to the insurance company and say you have proof that this car is worth more than £xxxx amount and get them to give you (or the finance company) the cheque for this amount.

waster_2

You can also insist that the insurance company put you in the same position you were in before the accident. If they continually offer you what you know to be less than you can buy an equivalent vehicle for locally, tell them that you want them to buy you an equivalent vehicle to the one they have written off. Or otherwise to show you where you can buy the equivalent vehicle locally for the sum they they are offering. They are legally obliged to leave you no worse off than you were before the accident.

On the finance sitaution, your sister is still liable for all outstanding monies. If you buy a new car there can be a substantial gap as the car will lose anything up to 30% of its value when driven off the forecourt. In addition you will still have the interest or early redemption charges to pay when settling. This can be covered by gap insurance as metioned above.

Furthermore, the type of loan will be relevant. If it's HP, then the HP company technically own the car and you should let them know it's been written off and ask how they want to deal with the matter. If it's a Personal Loan, then you can do what you want with any settlement and just keep paying the monthly installments if you do not want to pay it off.

The one thing that you must not do is accept the insurance company's first offer or any offer that you know is inadequate. Good luck

frosty

Thanks everyone I have emailed all your advice to my sister and fingers crossed it will all turn out alright.

vansboy

& also check your policy to see if you've paid for any no claims bonus protection.

& Legal Expenses cover - this'll fight for your additional losses.

& might be worth checking the small print on your HOME insurance, for any additional Legal Expense cover.

All might just help!

VB

Astaroth

Remember that the insurance company will pay the private sale value of the vehicle not a second hand dealer price... there are plenty of websites out there like Parkers that will give you a rough idea of the value of the vehicle (again look at private sale) but charge you for adjusting it for mileage etc.

The insurance company will settle directly with the finance company if it is on a HPI finance package. As others have said you can contest the valuation of the vehicle if you honestly dont think it is fair but insurers (or at least all the ones I have worked for) do not give a low offer initially expecting you to argue it up.

Also remember that she will be no longer entitled to any hire or courtesy car (unless she has one of these "guarnteed hire car" extentions) once the initial cheque could have been sent and cashed... so if you argue for 3 months over the valuation you dont get any form of insurance paid for car during that period.