Ppi

saintly_2

i have read a few posts regarding ppi on loans and was a bit confused. i have got ppi on my car and natwest loan. am i able to cancel these ppi agreements or not?? had an email from a company to "ask" have i been misold ppi? i dont know, have i??

in_over_my_head_2

Are you still paying the minimum amount on the loans? Payplan advised me that as I'll not be doing this any more then I can't actually claim on any insurance I may have with them so I need to cancel them.

saintly_2

yeah i am still paying the normal minimum payments back havent missed any payments.

thanks

in_over_my_head_2

I also read/heard somewhere that the ppi that they offer when you take out the loan is often not the best product (there's a surprise), but obviously most people think it is... Apparently you can shop around for it, but banks count on people not realising that.

Too late for me tho

Xbigman

Is it good value?
PPI can be bought as a stand alone insurance policy for literally a few pounds a week. But if you buy from the people who sold you the loan they will want a lump sum to cover the insurance for the whole life of the loan, and that lump sum is added to the loan, so you pay interest on it. It is almost never good value for money.

Should you cancel?
In theory it would save you money to cancel and take out the stand alone insurance. There's a 'but' though. You have already paid for the insurance with borrowed money. If you cancel you will only get a rebate, not the full amount back. It will not do much to reduce your loan as a % of the loan, but with a big loan it might add up to thousands and still be worth it.
You also need to consider if you need the cover. The percentage of policies that actually pay out is small and the ways for insurers to wriggle out of paying are numerous. There's also instances of insurers taking so long to pay out that the penalties for missing payments actually outweighs the insurance payout. My personal opinion is that it is not worth it, but you might just feel you need the insurance cover to continue.

Can you cancel?
You can certainly try. A lot of companies will tell you they will cancel the insurance but you need to re-do the loan. You should have none of this. If it does happen send in several letters to customer services and keep repeating that you wish to cancel. If they keep ignoring you then write to the complaints dept of your lender and complain. There's loads more about this on the 'loans' board.


Was it mis sold?
Certain groups of people, such as self employed, short term contract, agency, freelance, any new starter in a job (less than a year), etc.. for who this insurance simply will not pay out. If you tell your creditor this information and they still push the PPI on you then write a letter to their complaints dept cancelling and demanding a full refund. Again, the loans board has more threads on this sort of thing.
Regards



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