Car on finance written off

FirstTimeBuy_2

Hi just wondered if anyone could help please.

My boyfriend had a car accident 3 weeks ago where his car was written off. It wasn't his fault.

His car is a Seat Ibiza SE Copa and he had only had it since September 2011 (he bought it brand new). Immaculate condition. He bought it on finance and currently owes £8500.

It has taken 3 weeks for the insurance to come back with a settlement for his car. The first offer was £7035. He was told to decline the first offer. They have now told him that his courtesy car will be picked up on Monday as they have issued an offer for settlement. Today they have said his car his worth £9100 today but because it is a write off, they have to take 20% off this price and are now offering him £7300. Is this correct??

We can't understand why he pays car insurance and has never claimed and the accident was not his fault, yet he will end up still owing money on finance with no car and nothing to put towards a new one.

He has 48 hrs to let the insurance know if he is accepting their offer. Is there anything he can do?

Thank you in advance!!

Inner_Zone

The insurance value of the car has no relation to the outstanding finance, that is what GAP insurance is for to cover the difference.

http://en.wikipedia.org/wiki/Gap_insurance

jcalow

Their deduction of 20% of the value seems pretty strange, I would ask for more reasoning on why they are doing that. I have bought several cars on finance over the years and would say that is always important to get GAP insurance. Dealers always try to sell you this at usually a rip off rate but if you shop around you can get a good deal. GAP insurance is basically just a second policy that will bridge any gap between your car's value at time of right-off and what you owe on your finance.

jcalow

Apologies for posting a second time but just thought of a couple of things to add. Firstly, I would check that you haven't bought a GAP policy without knowing. Dealers love to sell you all sorts of extra stuff when selling a car and try all sorts in order to do it. When buying a car once, I declined their GAP policy because I could get one cheaper else where. When I returned to pick up the car and sign the finance I found that they had tweaked the figures and sneaked the GAP policy back into the finance agreement thinking I wouldn't notice!
Secondly, and I am not certain on any of this but I believe that dealers may now be obligated to explain to you the dangers of not having a GAP policy and I think that this is an FSA requirement. I bought my latest car back in February from Ford and they went into a lot of detail explaining how they were regulated by the FSA and they had to ensure that I understood what I was buying so that they weren't guilty of miss-selling. I have a document that they went through with me that says at the top of it about their obligations under FSA and then lists everything they tried to sell me, including GAP insurance and my reasons for accepting or declining. I had to sign at the bottom. If you don't know about the dangers of running a new car on finance without GAP insurance and your dealer didn't tell you and they can't prove they did you may have a claim against them for miss-selling. I am not at all certain of this but I would certainly question it if they didn't explain this to you.

Hope this helps (sorry if its a bit of an essay! )

rs65

jcalow wrote: »

If you don't know about the dangers of running a new car on finance without GAP insurance and your dealer didn't tell you and they can't prove they did you may have a claim against them for miss-selling. I am not at all certain of this but I would certainly question it if they didn't explain this to you.

I don't think you can accuse them of mis-selling if you weren't sold it.

OP, is this your insurer or the third party insurer he is claiming from? Did they explain the 20% deduction?

Beachview_2

Have a good read through your finance documents,you should have GAP. I'd be surprised if you didn't have it. If you no longer have the paperwork give your dealer a ring, they'll be able to tell you if a GAP policy was taken out.

dacouch

rs65 wrote: »

I don't think you can accuse them of mis-selling if you weren't sold it.

OP, is this your insurer or the third party insurer he is claiming from? Did they explain the 20% deduction?

Sounds like it's the salvage value, it's likely to be the third party Insurers.

arcon5

They will pay you the current value of the vehicle - the problem is you did buy it brand new and brand new cars loose value very quickly. Look on Autotrader and other websites to see what similar models are selling for.

Although GAP Insurance is what usually covers this sort of short fall.... I wonder if you could class the short fall as a consequential loss? Somebody else will know more about car insurance than me.

Otherwise (and others may not like this) i'd be inclined to make a personal injury claim to cover the shortfall.

FirstTimeBuy_2

They've explained that the 20% is basically what they will lose on the car when they come to sell it. It's easier for them to write it off, pay my boyfriend off and then have the car fixed and sell it on.

He's just looked through his paperwork now and has a "GAP insurance payment details" sheet but not sure whether that means he took it out or not. How would you know? We were sure he had opted out after they went through all the paperwork with him.