Final finance figure after car written off

Turbogal

Hello,

My beautiful car was hit today by a foreign lorry who failed to see a roundabout with me on it. I contact insurance co and have sorted out the vehicle being collected and have a hire vehicle for the next two days until the garage where it has been taken provide me with their courtesy car.

The car is on HP and I was feeling quite optimistic about how smoothy it had all been dealt with until the RAC man turned up to pick it up, looked at it and said that it was likely to be a 50/50 for being a write off. Optimism burst in one minute.

Now this is my question:

I took out finance for 6495 against the car which was 6995, this was in June last year. I have just checked my settlement figure which is 5295. When I have agreed the figure for the car with the insurance company and they pay the HP company, will this be for the settlement figure or will they expect the whole 6495? Obviousy I am going to have to make up the shortfall to pay it all off.

I am hoping that this question is hypothectical and that it will fall within the threshold for repair, fingers crossed and thanks in advance for any replies.

wgl2014

How much do you owe on the car?

Turbogal

About 6,300, but if I settled early then 5295, debt is 30% paid off.

wgl2014

The insurance will pay market value for the car if it's written off. You don't have to accept their first offer if it is too low. If the pay out is less than your settlement figure you will have to pay the shortfall.

Turbogal

Thanks for the reply....

So they would use the settlement figure for the amount owed, not what I owed in total, as effectively I am settling up early, albeit minus a car now?

angrycrow

If the car is deemed a total loss the insurer will obtain a settlement figure from the finance company. If the settlement figure is lower than the total loss figure less excess the insurer will pay off the finance directly to he finance company and send you the remaining balance. If the total loss figure less excess is less than the finance settlement figure the insurer will pay what they owe to the finance company and you will need to negotiate settlement of the balance with the finance company.

You will also need to complete section 9 of the V5 (log book) with the insurers details and send this to the DVLA the insurers will either ask you to send the rest of the V5 to them or leave it in the car for the salvage company.

AdrianC

Your insurance policy owes you the fair market value of the car immediately before the impact.

You owe the finance company whatever the settlement value of the finance is. Only your finance company can tell you what that is.

If the insurance payout is lower than the settlement value, then that has to come from your pocket. Gap insurance would have sorted that.
If the insurance payout is higher than the settlement value, then that goes into your pocket.

arcon5

Settlement figure is irrelevant to them... if the vehicles only worth £4K like for like they'll pay that leaving you footing the difference. That's why people take out gap insurance with car finance to cover this.

Turbogal

Thanks for the replies, I certainly think that the valuation of cars is not right and biased towards the Insurance companies. I have found one identical to mine for sale for 6250, few thousand miles out in their favour, but I am not daft enough to think that I will get anything like that. However, I have taken a screen print of it to argue my point! Fortunately I have money in my savings which seems doomed to be spent on topping the finance agreement up. I take it they have to settle the figure with me and not the finance company, seen as I am the one paying the insurance?

arcon5

Turbogal wrote: »

Thanks for the replies, I certainly think that the valuation of cars is not right and biased towards the Insurance companies. I have found one identical to mine for sale for 6250, few thousand miles out in their favour, but I am not daft enough to think that I will get anything like that. However, I have taken a screen print of it to argue my point! Fortunately I have money in my savings which seems doomed to be spent on topping the finance agreement up. I take it they have to settle the figure with me and not the finance company, seen as I am the one paying the insurance?

Not at all. Market forces determines valuation!!
Their obligation is to put you back in the same position as before, so if your car markets for x they pay x.

What car and spec is it

AdrianC

Turbogal wrote: »

I certainly think that the valuation of cars is not right and biased towards the Insurance companies. I have found one identical to mine for sale for 6250

Advertised prices mean nothing - especially when people are actively looking to find the highest prices they can... SOLD prices, now they're the important figure...