Car write-off settlement for car on finance

Bad_Ash

I bought a car on finance, which at the end of 18 months I could hand back or pay the balloon payment to own it.

9 months into the agreement the car has been written off (not my fault).

My question is will the insurer pay me the market value of the car if this is greater than the balloon payment (plus early termination fees) to settle the finance agreement?

I was planning to pay off the balloon payment at the end of the term and sell the car privately for a small profit.

The claim was originally being handled by a 3rd party company, but once they decided it was a write off they asked if there was credit on the car, and when I confirmed there was they said they must hand the claim back to the insurer for settlement.

glentoran99

They would pay you the balance after settlement, however I will be surprised if that's an issue and more than likely they will offer less than is outstanding, Hence the gap insurance market

Quentin

The insurer will pay the market value to the finance company


You hopefully have gap insurance to cover any shortfall between this and what you owe.

Marktheshark

If you are caused a provable uninsured loss, you can sue for the loss.

Bad_Ash

To clarify, I had a pretty decent deal. List price of car was £43k. Credit agreement total was £33k, with balloon payment of £27k after 18 months.

After 18 months I expected market price of car to be £30k, hence paying the balloon payment for a £3k profit.

Under this scenario gap insurance didn't seem to be necessary as the market value of the car would always have been a fair bit above the credit on the car.

EDIT: At this point in time I expect repayment fee of ~£30k (£27k plus early termination) but market value of car is £33k. So I'm hoping to be £3k in profit as I would have been in 9 months time without the accident.

Aretnap

Was the car new when you bought it? If so, if it's written off in the first 12 months, most insurers will replace it with an equivalent brand new car rather than paying you the market value, subject to a few conditions.This would require you to claim through your own policy rather than directly from the third party insurer. Check the terms of your policy.