ACF Car Finance missold GAP insurance help needed

bloodstone3

I purchased a car last year in Sept 2008 from a company called Approved Car Finance. As part of their package they initially pre-arranged finance form a company called The Funding Corporation. After I was told how much I could borrow I was allowed to choose a vehicle from their stock list. At this point I was encouraged to purchase GAP insurance, which was sold to me on the basis that if the vehicle was declared a total loss then my insurance company would pay the current market value and the GAP would cover the difference between that and the remainder of the finance.
I had a no-fault accident this year in July and the vehicle was written off by my insurer. They have now settled and I naturally thought that the GAP insurance would cover the remainder of the settlement figure. They however have only paid a fraction of the balance, stating that their policy only covers up to the recommended book price (Glasses Guide) at the time of purchase. They go on to suggest that the vehicle was £3500 over priced at the time of sale. I have checked the wording of my insurance contract and it does state this fact in the small print. This has left me with a balance of £3500 and the finance company are threatening that if I do not pay this with 14 days then I will be liable for the full remainder of the loan which is over £10,000.
My question is this. Can the retailer who sold me the vehicle, knowingly sell me a car that is substantially over priced and at the same time arrange finance with a insurance product that they must have known would not cover the full amount of the loan in the event of a total loss?
Pls advise as I really don't know where else to turn. I do not have the means to pay the £3500 and I am worried that I will be left with a substantial debt. This feels completely unfair to me but I need to know if it is also illegal?

ilovebanksMCMLXXXI

bloodstone3 wrote: »

I purchased a car last year in Sept 2008 from a company called Approved Car Finance. As part of their package they initially pre-arranged finance form a company called The Funding Corporation. After I was told how much I could borrow I was allowed to choose a vehicle from their stock list. At this point I was encouraged to purchase GAP insurance, which was sold to me on the basis that if the vehicle was declared a total loss then my insurance company would pay the current market value and the GAP would cover the difference between that and the remainder of the finance.
I had a no-fault accident this year in July and the vehicle was written off by my insurer. They have now settled and I naturally thought that the GAP insurance would cover the remainder of the settlement figure. They however have only paid a fraction of the balance, stating that their policy only covers up to the recommended book price (Glasses Guide) at the time of purchase. They go on to suggest that the vehicle was £3500 over priced at the time of sale. I have checked the wording of my insurance contract and it does state this fact in the small print. This has left me with a balance of £3500 and the finance company are threatening that if I do not pay this with 14 days then I will be liable for the full remainder of the loan which is over £10,000.
My question is this. Can the retailer who sold me the vehicle, knowingly sell me a car that is substantially over priced and at the same time arrange finance with a insurance product that they must have known would not cover the full amount of the loan in the event of a total loss?
Pls advise as I really don't know where else to turn. I do not have the means to pay the £3500 and I am worried that I will be left with a substantial debt. This feels completely unfair to me but I need to know if it is also illegal?

Hi

I used to be a car salesman (for a dealer and not a supermarket).

I'm not sure this will help completely but it may give you a little bit of insight.

As a rule, GAP cover the difference between the insurer payout and the book price. There is another insurance cover called RTI which is Return to Invoice, it would be that one which would cover the difference from your initial purchase.

I'll have to do a little bit of assuming here - the fact you went to Approved Car Finance would suggest getting a car through a dealership finance programme may be an issue for you? Forgive me if that's not the case.

At a dealership, a funder will not allow the dealer to overprice the car by more than about 10% because it allows too much scope for ripping people off.

This 10% allows for people to add the price of mats, roof bars etc into their finance agreements.

I don't know how they do it but these car supermarkets have found a loophole where they can exploit the system and charge what they like.

If it's in the small print I'm afraid you will have little comeback on the finance side of things.

As for the GAP, that sadly sounds like it has done the job it was intended but you could call the FSA if you genuinely believe it was misold.

I'm sorry if that's not what you wanted to hear but hopefully it will answer the odd query.

Best regards