HP shortfall help

Gavin1807

HI
I need some help, I have a car on HP finance 2 years into a 5 year agreement.
I had a NON fault accident last week and my car is going to be written off, the damage is £7000, the settlement figure from the finance company is £8300 and the insurance valuation is £6500.

I don't have GAP (hindsight is a wonderful thing).

I don't want to lose the car, can someone tell me what options I have with regards to keeping the car, or recovering the shortfall or increasing the amount offered (from either his or my insurance)or any other advice you can give me would be appreciated.

Can I make his insurance company replace the car as all cars advertised that are same spec are at least £7500

Thanks

AdrianC

You can argue the valuation of the car, sure. But are you absolutely 100% you're comparing apples with apples?

You may be able to persuade the insurer to let you buy the salvage back, and then get the car repaired yourself - it'll depend on the amount of damage and on the type of finance, as well as on the insurer's whim to a certain extent. It will still be flagged as written-off, though - presumably CatS, structurally damaged?

Even at ~£7,500 value for a car that's got a £7,000 estimate for structural damage, it's never going to get repaired by the insurance. Take salvage value off that, add a bit for the risk of cost escalation and the cost of a hire car for the duration, and it'll be straight to Copart, do not pass Go.

Any shortfall between the finance settlement and the payout is your problem. Insurance pays the market value of the car, no more. If your negative equity was settled, that would be betterment.

Before collision: You had a ~£7,500 asset and an £8,300 debt. You owe £800.
Insurance payout: You are paid £7,500 for that asset which has ceased to exist. You owe £800. You are left level.
Insurance settle finance: You owe £0. You have received betterment to the tune of £800.

The only debate is whether it was a £7,500 asset (leaving £800 debt) or a £6,500 asset (leaving £1,800 debt).

Gavin1807

Thanks for the advice,

Yes there is only 1 car in the country that I can find with the same mileage, age, condition.

Hopefully I can get a higher offer from the insurance company.

Do you know will the payment go to the finance company directly?

Many thanks

AdrianC

Gavin1807 wrote: »

Yes there is only 1 car in the country that I can find with the same mileage, age, condition.

That doesn't mean that's what your car is worth. The vendor of that might be a blind optimist who is never going to shift it at that price...

I presume this is something that's relatively prosaic, so is going to be in the various industry-standard price guides.

foxy-stoat

What is the car, age, mileage, condition?

Debt settlement vs market value is always going to be an issue with car finance.

debtdebt

Gavin1807 wrote: »

Thanks for the advice,

Yes there is only 1 car in the country that I can find with the same mileage, age, condition.

Hopefully I can get a higher offer from the insurance company.

Do you know will the payment go to the finance company directly?

Many thanks

Once the car get's written off, the insurer usually does an HPI check, contacts the company with any financial interest, obtains a settlement figure and sends payment straight to them. Then the finance company will come to you for any shortfall.

Gavin1807

debtdebt wrote: »

Once the car get's written off, the insurer usually does an HPI check, contacts the company with any financial interest, obtains a settlement figure and sends payment straight to them. Then the finance company will come to you for any shortfall.

Will the car then be returned to me?

Gavin1807

foxy-stoat wrote: »

What is the car, age, mileage, condition?

Debt settlement vs market value is always going to be an issue with car finance.

Audi A6 sline 2 litre diesel le mans 80000 miles FSH 2010. excellent condition

debtdebt

Gavin1807 wrote: »

Will the car then be returned to me?

Probably not. If you ask to buy the salvage, they might sell it you.

debtdebt

Having had a quick look on Autotrader, I'd say £7500-£7750 would be a fear settlement figure.

Gavin1807

debtdebt wrote: »

Probably not. If you ask to buy the salvage, they might sell it you.

But if the insurance is paying (most of the finance off) shouldn't the car be mine? .. I'm not at fault.
and i'm sure they have to indemnify me?