car finance agreement

zoominov

Hi all,
I recently had a car accident on the car i had finance on , if the car is written off then what happens ? ,I've heard that the insurance company pays out to the car finance company but the car is worth 7.5k or so , the total cost of the agreement is £11k , if the insurance company pays out 8k then do I have to keep on paying for the finance until I pay the difference ?

Tixy

Did you buy GAP insurance on the finance?
If so then it will pay the difference.
If not then you will have to keep paying the remainder of the finance after the car insurance payout until its fully repaid.

zoominov

Tixy wrote: »

Did you buy GAP insurance on the finance?
If so then it will pay the difference.
If not then you will have to keep paying the remainder of the finance after the car insurance payout until its fully repaid.

No I didn't ,

Even if the car doesn't exist I still have to pay wow

Tixy

zoominov wrote: »

Even if the car doesn't exist I still have to pay wow

That is my understanding and, I suppose, the reason that GAP insurance exists - unless someone else reading knows differently, in which case I'm sure they'll correct.

kemby1977

I thought that the insurance company settles the outstanding finance with the finance company hence why you have to have fully comp insurance when you have a car on HP? Basically you are left with no car but also nothing left to pay?

Nick

BugsyBrowne

Think you will find Tixy is correct here.

Apples2

Even worse is that the Insurance seldom pay out the going rate for the car.

They normally come back with a derisory offer which you may not be able to argue with if it goes direct to the owners of the car (the finance company) leaving you with a huge shortfall to make up.

In an even worse case they may request full payment as their "secured asset" no longer exists. This is what GAP Insurance was invented for.

KingElvis

GAP insurance was the key here, if you don't have it, you're screwed and will have to keep paying the difference.

chanz4

100% correct, you will be liable for the shortfall of the agreement, pro-rate insurance etc

kemby1977

star-fire wrote: »

Think you will find Tixy is correct here.

My mistake, you learn something everyday

To the Op, the insurance will only pay out the market value, you will have to deduct that figure from the remaining finance due and unfortunately you will have to stump up the difference hence why GAP is a good investment.
Dont accept the insurance companies first offer as they will try and pay as little as possible.
Use auto trader,pistonheads ect and email them a few examples of your model of car so they are aware what you are looking for in respects of your car.

HTH

Nick

zoominov

Thanks for that , I rang up insurance company told them what happened , mechanics will contact me tomorrow to arrange a pick up of the car , the insurance company said i will have the final say if they scrap it , regardless if it's written off I will get it repaired , the left door doesn't open nor does the boot , the engine has gone it radiator smashed , alot of people saying it's a write-off I hope not , the value of the car is £5,230 - £6,709 , If the repair bill is more than that then it will be a write off