Contract Hire settlement

marsman802

Hi

Recently had a car accident and my car, on contract hire finance, was deemed a total loss.

It was brand new on a 2 year contract hire agreement.

The insurance payout, from Glasses guide, appears to be £5k more than the amount that VW want for their written off vehicle.
I only have about £1k remaining on the rentals so I assume I just pay that off (or don't and just pay the remaining monthly installments) with the £5k surplus?

If this is correct I wonder why I bothered taking Gap Insurance at the outset given the large surplus here - it's not to do with VW down valuing their assets on their books due to the 'defeat device' scandal (my car is in this group of cars)?

AdrianC

marsman802 wrote: »

If this is correct I wonder why I bothered taking Gap Insurance at the outset given the large surplus here

Because if it'd been the other way round, and you'd owed more than the payout, you'd have been VERY grateful for that gap policy.

marsman802

Oh I've been paid the surplus - They've settled the cost of the vehicle with VWFS directly (£15k) and paid me the £5k which brings it up to the Glasses guide amount.

The only thing left is the £1k that is the remaining rental termination period for the contract hire.

I'm grateful - my surprise is just how this has worked given the Glasses guide is the standard valuation yet VWFS have only asked for much less.
I've had all the final paperwork so it is as it appears.

marsman802

lostinheaven wrote: »

Ah I see.

That's a really interesting way of them doing it. In my own experience of a leased vehicle being written off, the finance house simply declared a figure that they required in order to allow me to walk away, that figure was a combination of what they thought the car was worth AND the outstanding rentals under the agreement.

I'm surprised that it's been handled the way it has for you because now, should you be so inclined, if you stopped paying the outstanding balance, they have nothing in the way of easy leverage (e.g. what are they going to reposess? They can't come after the car anymore!)

It strikes me that they've left themselves a little vulnerable.

Yes I read on pistonheads website that they dealt direct with finance company and left it at that so was a little surprised at the call with the insurance company explaining what would happen.
I guess I wouldn't just cease paying anything as the finance is a loan and wouldn't want a blip on the credit record but I totally understand your point - don't fancy mixing it with the bailiffs

andrewn_2

eh? it's brand new but you only have 1k left on rental?

neilmcl

andrewn wrote: »

eh? it's brand new but you only have 1k left on rental?

"WAS" brand new, eg not a used car lease.

marsman802

Yes was new at the start of the agreement. Total loss @ 17 months into term.

The term fee with VWFS doesn't even equate to the remaining rentals on the 2 yr term.

Essentially I appear to have had the car for 17months and the end result is that it hasn't cost me a penny as the surplus is roughly the same as what I've paid out over the last 17months.