Car Finance Early Settlement Nightmare

Walsh31

Hoping someone can help. My husbands car was written off (not his fault) 16 months into a 60 month finance agreement. The other party admitted liability so no issue there. The finance company gave an early settlement figure of £10800 at that point, the book price of the car was £8300. Obviously meaning a shortfall of £2500. Fortunately we had a gap insurance which covers this. The insurance company have paid the £8300 direct to the finance company, all good so far. Now the finance company are demanding an additional £6750 not £2500. This means they would be paid circa £20k which is what we would have paid in total in instalments after 5 years. Despite numerous requests they will not provide details of what the £6750 is, we have tried to pay the £2500 but they have said they won't accept it as its not enough. Any advice on what we can do to resolve this would be greatly appreciated.

andyfromotley

Is this not a matter for the people who issued your gap insurance to deal with?

I would just refer them to each other.

Obviously do not pay them anything that they cannot or will not explain.

chanz4

read your agreements, what type of gap was it, rti?

sheramber

If I understand it right the finance company are asking for the equivalent of the balance of the full finance term payments ( 60 months worth) despite the loan being paid off early.

Does your finance agreement allow early repayament without penalty?

Walsh31

Thanks all for your responses. To Clarify the Gap Insurance covered the difference between the write off value and the purchase price and has been paid direct to us. The issue I have is that the finance company gave a settlement figure of £10,800, £8300 of which has been cleared by our insurer. Now we have the gap payment we have tried to pay the outstanding balance to the finance company which by my calculation is £2500, however they are demanding £6750 and despite numerous requests cannot explain what this figure is or provide any documented statement or breakdown of our account. I suspect that what they are trying to do is exactly what you say as in 60 months worth of payments. In addition we have today had a letter from them offering a 25% discount, this suggests to me that they are trying it on, either we owe them the money or not!! Any views would be gratefully received. Thx again.

Nearlyold

Was the finance agreement a business/commercial one?


If it was normal consumer credit they should usually only charge you the interest due to date plus 28 days penalty interest, this rule has been in place since late 2004. Which finance company is it and what type of finance was it. i.e. HP, PCP, Lease, Personal Loan. There should be example early repayment settlement figures in the finance documents what do these say.