GAP insurance

warren88

Hello,

After seeing some articles on the main site about time running out to claim back, I decided to check my paperwork.

Have read a few threads on whether the GAP insurance can be claimed back the same as PPI, this one is slightly different.

Purchased car (On finance) in Sept 2010.

Before collecting the car, I paid a sum upfront (to bring the cost of the amount borrowed down) and also paid the full cost of the GAP insurance.

However, on the paperwork, the GAP insurance was added to the cost of the finance for the car, so I was charged interest on that even though I had already paid for it in full.

Also, even though I paid a sum upfront, the total cost of the finance was the original price of the car plus the GAP Insurance.

This may or may not be correct, was just wondering what your thoughts were.

[Deleted User]

If you paid for the insurance in full separately and have documentary proof of this, then of course the amount should not have been added to the total cost of the loan.

If this turns out to be the case (unlikely), then a refund of any extra interest associated with the insurance cost should be refunded to you. However, I can't help feeling you may have mis-read the document or assumed you paid for the insurance when in fact you simply paid a deposit on the cost of the car alone.

As for the insurance itself, in what way would you say it was mis-sold to you? You cannot "claim" it back simply because you haven't used it!

Nasqueron

When I got my new one the dealer heavily pushed the company's GAP insurance and did the quote with it on so the finance package I paid would have meant the GAP was included in the finance and thus I would have paid interest on it as well. Fortunately it was on 0% and once I got the car I cancelled their GAP and got it separately.

The finance documents they have to give you as part of the affordability will show if it was included in the whole of the loan

warren88

Thanks for the replies.

Moneyineptitude - I have 2 receipts that state both payments. I can remember paying for it upfront (GAP) Both payments show on the Finance papers as an advance payment (States Conditional Sale Agreement on top of these) But it does not have a breakdown. I have both sets of papers (Finance and GAP insurance) I didn't say it was mis-sold, I just decided to have a look to see if all was done as it should have been (Still checking this out)

Nasqueron - I have all the paperwork, it is definitely included in the finance price even though I paid it upfront.

Thanks

Nearlyold

You only pay interest on the amount you actually borrow, its not clear therefore why you would think you may have paid interest on the cost of the GAP policy. Its perfectly normal for a finance agreement to show the cost of all the goods purchased, if the GAP policy cost £349 and you paid an extra payment of £349 to the dealer and this advance payment is shown on the finance agreement together with your vehicle advance payment (and you say both show) then nothing in respect of the GAP policy has been added to the amount borrowed.

[Deleted User]

Nearlyold wrote: »

. Its perfectly normal for a finance agreement to show the cost of all the goods purchased

That was my impression too. The OP is reading the documentation incorrectly.

warren88

Probably me being silly, I will check it again when I get home.

Thanks

Nasqueron

OK just to reiterate as I have the paperwork in front of me

Car price £19575
Paint job £450
VAT 4005
GAP 499
Reg fee 55
Total 24584

-500 deposit
- down payment 4500
Total from finance company: £19584

Thus the GAP insurance was included in the total finance package that was loaned so I would have paid interest on it during the repayment if I was on a non-0% APR deal.

If it was paid up-front then perhaps that is different in the OP case but with my finance from Santander the GAP was included in the total finance package

Nearlyold

Nasqueron wrote: »

OK just to reiterate as I have the paperwork in front of me

Car price £19575
Paint job £450
VAT 4005
GAP 499
Reg fee 55
Total 24584

-500 deposit
- down payment 4500
Total from finance company: £19584

Thus the GAP insurance was included in the total finance package that was loaned so I would have paid interest on it during the repayment if I was on a non-0% APR deal.

If it was paid up-front then perhaps that is different in the OP case but with my finance from Santander the GAP was included in the total finance package

Obviously if you finance any part of the purchase, anything that you add to the deal that you don't match equally with an increase in deposit is going to add to the overall borrowing and will attract interest.
Even if you paid for an "extra" completely separately you will still pay more interest than if you didn't buy the extra, because you could otherwise have put the payment for the extra towards a larger deposit.
If you ignore the £4500 down payment which more than covered all the "extras" anyway you could also equally argue in your case that your £500 deposit covered the GAP policy and that it's actually the paint job that you paid interest on.

What the OP seemed to be saying was that he had paid separately for the GAP policy and thus it shouldn't show on the finance agreement, this would only make a difference if the advance payment for the GAP policy was not shown on the agreement, if the advance payment for the GAP policy wasn't shown this would not only mean that he had paid interest on the GAP policy, it would also have meant that he actually paid for the GAP policy twice!

Nasqueron

I wondered more if the OP believed he had paid for GAP upfront but that was something else and GAP was added to the finance after as it does sound like that or he paid twice (or misread the document)

[Deleted User]

Misread the document..