insurance write off excess milage

Gene_Geney

ianh68 wrote: »

Sort of. My point is that I have fully paid the finance off. Had I done that in cash there would be no charge. The fact it comes from a third party seems odd. I get the excess mileage if you are handing goods back of course as it affects value. But either it is a conditional sale agreement regulated by cc a in which case I pay what is due or it isn't. They would only ever have received the same if I had done one mile or one hundred thousand had I paid them so why is it different for third party payment. Their only argument I can see is that had it not been written off they would not have had to rebate the interest but that seems marginal at best to me.

If the finance has been fully paid off then I do not understand why they are trying to charge you for excess mileage. My understanding is that excess mileage is there to compensate the lease company when they are unable to sell the car on for as much as they otherwise would have.


In this case the car is written off, so no resale, and the insurance company has cleared all of the finance. So there is no loss to the lease company.

ianh68

No They sent a settlement figure and they got it all. Most of finance was paid off and had big deposit. That's kind of why am wondering I guess but yes full settlement paid so don't think they could have got any more.

thebritishbloke

If they sent you a settlement figure and it was paid, then under the consumer credit act they shouldn't be able to chase you for anymore money.

iolanthe07

I think that either they're trying it on or it is a genuine error. From what you are posting I don't see how there could possibly be an excess mileage charge in the circumstances.

bris

The only way there would be an excess mileage charge is because it was a lease or PCP with a balloon payment on the end.

So although your finance was cleared there would still be the balloon payment the insurers would have to pay. You deal was based on miles per year so you hand it back with a value at 12k per year (or whatever it was) for 36k for a 3 year deal, the value is based on these figures.

If you went over the allowed mileage then the insurers would pay less so you owe the money. Regardless they are entitled to the value from what you would have had to pay as if the contract ran to conclusion.

ianh68

Thanks people really helpful. There is no balloon payment nor termination fee and not PCP or lease just a conditional outright sale. So looks like they may have made a mistake. Will post when spoken to them.