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HP Voluntary Termination
Comments
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hayward-kennedy wrote: »I don't recall anything about any Shortfall Insurance. Would this be dealt with separately to ending the finance and sending the car back? So they couldn't stop me handing it back until this insurance is paid off, could they? Could I deal with it like a normal creditor and make monthly payments?
If they are duping people into taking it, isn't this going to end up like another PPI situation?
The ombudsman has been looking into GAP already, you get a 30 day cooling off period to cancel and get a full refund (after that it's reduced based on how long it has been running). The main issue is the poor value offered on dealership GAP and customers should be allowed to shop around. It's "duping" in that customers are not always aware they can get better value policies elsewhere
As an example, I got a policy for £499 on my new car - covered 3 years - however, as my insurance policy provides a new car if there is damage that will cost over 60% value in the first year I was effectively paying £249.50 per year - I checked out some comparison sites and got a policy from a reputable provider for about £233 with a deferred first year meaning I get 4 years cover for less than it would cost for one year from the dealer! I got a full refund on the policy (and fortunately my finance is 0% so not going to be paying interest on the GAP as it was included in the purchase price)Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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It's nothing like PPI, as it's an additional service and has to be very clearly stated in your finance documents that it's separate and how much it costs etc. They almost always add it on to the finance figure.hayward-kennedy wrote: »I don't recall anything about any Shortfall Insurance. Would this be dealt with separately to ending the finance and sending the car back? So they couldn't stop me handing it back until this insurance is paid off, could they? Could I deal with it like a normal creditor and make monthly payments?
If they are duping people into taking it, isn't this going to end up like another PPI situation?
You may have to pay off the GAP insurance in full when VTing the car, depends on the documents you've received. You really just need to read those properly as it can vary from each person's experience.
Even £233 is expensive. I got £15,000 of GAP cover for £127 through ALA.As an example, I got a policy for £499 on my new car - covered 3 years - however, as my insurance policy provides a new car if there is damage that will cost over 60% value in the first year I was effectively paying £249.50 per year - I checked out some comparison sites and got a policy from a reputable provider for about £233 with a deferred first year meaning I get 4 years cover for less than it would cost for one year from the dealer! I got a full refund on the policy (and fortunately my finance is 0% so not going to be paying interest on the GAP as it was included in the purchase price)Credit 'Score' - Don't buy the credit 'score' that Experian, Equifax and Noddle want to sell you. It's an arbitrary number that means nothing when it comes to applying for credit.
ALWAYS HAVE A DIRECT DEBIT SET UP FOR THE MINIMUM PAYMENT ON YOUR CREDIT CARDS, REGARDLESS OF WHETHER YOU PLAN TO LOGIN AND PAY EACH MONTH.0 -
I have the 'full monty' one covering £24k for 3 years, did have a look around and think it was the cheapest of the three firms I looked atthebritishbloke wrote: »It's nothing like PPI, as it's an additional service and has to be very clearly stated in your finance documents that it's separate and how much it costs etc. They almost always add it on to the finance figure.
You may have to pay off the GAP insurance in full when VTing the car, depends on the documents you've received. You really just need to read those properly as it can vary from each person's experience.
Even £233 is expensive. I got £15,000 of GAP cover for £127 through ALA.Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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Ok, so I have an update.
They have written back to me and advised firstly that I need to pay another £242.53 to get to the 50% mark. They told me on 14th that I was already past the 50% mark so I'll dispute that part.
They also say I have to pay £264.50 for early settlement of the insurance.
From what some people have said, I will have to pay this "GAP insurance" if that's what it is (I wasn't aware I had it), but my question is this... if there is no physical possibility of me getting hold of the GAP insurance money, does that mean I cannot hand the car back? Can they not just treat this like a normal debt and let me pay it monthly? Don't I have some kind of right to that?
The final page of their letter is a form which they want me to sign, aswell as sending them a cheque. Should I be signing anything? When I read up on Voluntary Terminations it seemed like I shouldn't be signing any of their forms.0 -
I've also just read somewhere that GAP insurance is a separate agreement to the car finance, therefore shouldn't have any effect on the VT. So theoretically, I shouldn't sign their form, I should still be handing the car back and they can speak to me about the insurance separately?
There seem to be a lot of varying opinions on this matter, I wish somebody could just tell me 100% what the rules are!0 -
I hope your car is worth £30k+ new if you've taken out that much GAP cover. The GAP cover doesn't need to cover the entire price of the car, just the difference between what the insurance company would pay and the price of a new car.I have the 'full monty' one covering £24k for 3 years, did have a look around and think it was the cheapest of the three firms I looked athayward-kennedy wrote: »Ok, so I have an update.
They have written back to me and advised firstly that I need to pay another £242.53 to get to the 50% mark. They told me on 14th that I was already past the 50% mark so I'll dispute that part.
They also say I have to pay £264.50 for early settlement of the insurance.
From what some people have said, I will have to pay this "GAP insurance" if that's what it is (I wasn't aware I had it), but my question is this... if there is no physical possibility of me getting hold of the GAP insurance money, does that mean I cannot hand the car back? Can they not just treat this like a normal debt and let me pay it monthly? Don't I have some kind of right to that?
The final page of their letter is a form which they want me to sign, aswell as sending them a cheque. Should I be signing anything? When I read up on Voluntary Terminations it seemed like I shouldn't be signing any of their forms.
You can't pay monthly for VT's, the whole point is that you can hand the car back once you've paid 50%. You're not supposed to be able to hand the car back at any time and then pay the money you owe up to the 50% part in smaller monthly sums, it has to be paid before you can VT.hayward-kennedy wrote: »I've also just read somewhere that GAP insurance is a separate agreement to the car finance, therefore shouldn't have any effect on the VT. So theoretically, I shouldn't sign their form, I should still be handing the car back and they can speak to me about the insurance separately?
There seem to be a lot of varying opinions on this matter, I wish somebody could just tell me 100% what the rules are!
GAP will technically be separate, but it'll be bundled into the same HP contract, and that contract will no doubt say that you must settle the insurance in full if you VT, and they're well within their rights to say that. You'll have to pay it off, no way around it really.
Just read the form and if it seems normal and they're not trying to charge you any extra fees for the VT etc, just sign it. You don't "have" to sign it, but it'll save you a lot of time and effort if you do. Them having this standard form to sign means they can speed up the process and prove that you've legally agreed to VT the car.
They might be telling you to pay more money to reach the 50% mark, as you've still technically not VT'd the car, yet you've stopped paying your monthly payments and still have the car so you should have still been making monthly payments. Under the CCA they're within their rights to revoke your right to VT if you don't stick to the terms of the contract.Credit 'Score' - Don't buy the credit 'score' that Experian, Equifax and Noddle want to sell you. It's an arbitrary number that means nothing when it comes to applying for credit.
ALWAYS HAVE A DIRECT DEBIT SET UP FOR THE MINIMUM PAYMENT ON YOUR CREDIT CARDS, REGARDLESS OF WHETHER YOU PLAN TO LOGIN AND PAY EACH MONTH.0 -
thebritishbloke wrote: »I hope your car is worth £30k+ new if you've taken out that much GAP cover. The GAP cover doesn't need to cover the entire price of the car, just the difference between what the insurance company would pay and the price of a new car.
It's deferred for a year as insurance company will give a new car in the first year of registration for anything over 60% value damage and then covers me for 3 years.
Given depreciation, I can't imagine the insurers paying out anything close to what I paid for the car if there was an accident or theft after 12 months to even cover the finance, let alone replace the car.
With this 'replacement' policy I would get back what the insurance pays out plus enough to cover buying a brand new one, especially given the likely 60% drop in value after 3 years.Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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