Car write off what happens to my finance?

Uncheckedfish

Been in an accident earlier today, long story short basically my car looks like it almost definitely will be a write off. I'm currently on HP finance with the car to which I pay 100 pounds a month. If my car was to get written off would I recieve the payout and be able to purchase another run around so I can have some wheels again but then at the same time I'll still carry on with the 100 pounds a month finance as well. Or would the payout go straight to the finance company and then I'd be struggling to purchase another car? Hope this makes sense to you readers out there. Like I said I don't mind carrying on with the monthly payments just whether I willl recieve the payout and be able to get another car.

Thank you

thebritishbloke

Depends how far you were in to your HP. If you've only just taken it out, then odds are your finance won't cover the whole sum, and you'll have to pay some towards it (unless you have GAP insurance? GAP Insurance covers the shortfall between what your insurance company pays out and what it costs for you to get a brand new car).

If you've had the car for a while, they'll probably settle the finance. Don't expect to be getting any extra money towards getting a new car though, odds are you might end up with nothing. Be thankful you don't have to worry about paying it off though

You can't take the payout and not pay off the finance, you're obligated to pay off the finance in full as you've written off the car.

SeanG79

Insurance will pay the finance company. You should receive the surplus once finance is settled, if there is any, or be liable for the shortfall of the finance settlement figure, if there is any. Did you have any GAP insurance - this could help cover any shortfall.

You are still liable to pay your monthly payments while insurance is being sorted out, if you miss payments, late payments may be recorded, which may impact on your ability to obtain future credit.

You will need to settle the current finance and then obtain a new finance agreement for a new car, unless you receive a surplus from insurance and use that to purchase a vehicle outright.

Uncheckedfish

Thanks for your help, no I haven't got gap insurance, first time I've heard of it! That's not a problem I'm happy for the finance company to get the payout was just curious as to if I said to the finance company look can I carry on paying the monthly payments as normal and use the payout towards another car whilst still doing the usual monthly payments to the finance company. But anyway if that's the way it has to be then I'm sure I can make another plan to get some wheels again.

Uncheckedfish

Also should I contatct my finance company now or wait to hear back from the insurance company before I contact them.

jaydeeuk1

Is car under a year old?

Uncheckedfish

Noo it's a seven year old car

SeanG79

Was the finance a conditional sale/Hire Purchase agreement or a fixed sum loan agreement?

If it was a fixed sum loan then you can carry on making payments and don't need to notify the finance company, also if it is a fixed sum loan agreement, insurance will pay you and not the finance company.

If however it is a conditional sale/Hire Purchase agreement, then notify the finance company now, they will probably ask you for your claim reference number.

Uncheckedfish

According the statement I had recently it had on the paperwork a conditional sale agreement number, the amount of credit, the interest rate and the duration of the agreement I'm guessing this means it is a conditional sale yes?

SeanG79

It sounds like a conditional sale agreement, in which case, everything in my first post is correct.

Also you need to call the finance company and notify them of the incident and they will possibly request the claim reference number

These are usually fairly standard conditions on a conditional sale agreement:

You irrevocably authorise us to negotiate with the Insurers to settle any insurance claim and to receive the insurance monies.

We shall apply the insurance monies to your liability under this Agreement and in compensating us for any loss or damage that we may suffer or incur under this Agreement, you agree to pay us any shortfall on demand.

You must notify us promptly and no later than 14 days, of any loss of, or any damage to, the Goods and hold any insurance monies received by you in trust for us.

Any loss of, or damage to, the Goods shall not affect your liability to pay the Total Amount Payable or any other sums due under this Agreement.

Uncheckedfish

I've contacted them now and gave them the claim reference number, what a hassle haha don't think I'll be doing finance again. I'm guessing they will get in contact and any sort of payout will go straight to the finance company and hopefully it will cover the full amount of finance if not apparently I have to pay off the remaining balance in a lump some and will not be able to make instalments to pay of the remaining.