Car insurance/finance

josyd

I'm after some advice please. I have had an accident in my car and although it looks a mess it is fine to drive. My insurance company have classed it as a write off as it would cost more to fix than the car is worth. I have accepted the payout offer and taken the option to keep the car. My intention is to buy a new car with the payout and my partner will have the old car as he is into doing them up etc etc and needs a car anyway. I have outstanding finance on my car which is up to date but I have been told that the insurance company will pay off the finance then give me what is left (only about £200) not enough to buy a new car. Is this right? Surely if I choose to carry on paying the finance, is has nothing to do with the insurance company?

McKneff

Sorry but its exactly right, you dont choose, you have not choice in the matter.

Just buy another car, you wont be any worse off, you will probably be in the same position financially.

Instead of paying finance on an non existant car (so to speak) you'll be paying finance on a new one.

josyd

All very well in theory but since I got the original car although I have kept up repayments on that I have other debt which is in a dmp so cannot get new finance. I can't understand why they need to do this if the car is still on the road and the finance is still being paid.

Kilty_2

josyd wrote: »

All very well in theory but since I got the original car although I have kept up repayments on that I have other debt which is in a dmp so cannot get new finance. I can't understand why they need to do this if the car is still on the road and the finance is still being paid.

They can do this because when you buy a car on finance the car is the security on the loan. The car is worth £x and the loan is for £y. £x should pay £y if you default.

If you smash the car up and it is not repaired, £x << £y therefore the finance company will not let you keep financing the car.

mikey72

What class write off is it?
You have different classes and different work to put it back on the road after it has been written off.

josyd

I've no idea what class of write off they mentioned category C and D but don't know which it is. It's roadworthy and driveable, it's the side panels that are crumpled as I hit a bollard, like I said it looks a mess but works perfectly fine.

josyd

Also re Kilty's post, I'm sure I read somewhere that once you have paid a certain percentage on a financed car, it can't be repossessed because you effectively own more of it than the finance company? Not sure if this is right or not but wouldn't it work the same in this case? There's only about a year of a five year finance left to pay on it.

Kilty_2

Category is irrelevant, the finance must be paid.

It's not being reposessed, it's been written off and they are due the money from the insurer because they own the car.

josyd

They will get their money though as I'm still paying it and keeping the car so if I stop paying it they can reposess.

Kilty_2

You're not going to win this one, they gave you finance on a retailable car not on a write off.

josyd

Result!! Received my cheque for £1500 today from the insurance company! I spoke to them after I had posted on here and they told me it was up to the finance company whether I could keep the finance going or not, so I spoke to them and they were happy for me to keep the car and keep the repayments up without the payout from the insurance covering the remainder of the loan. This means we can do what we originally wanted and buy a bigger family car with the payout and keep on the damaged car as a work vehicle for my partner. ) Thanks for the advice.