Mis-sold GAP and RPP Insurance by The Car People

Brains1969

Hi all,

In 2014 we decided to buy a newer car and went along to the Ashton Under Lyne branch of The Car People and after a few hours, decided on a Citroen DS4 priced at £12395 with 2 years Warranty as a deal promise
We put our current car in as Part Ex and was offered £3500 for it. We also paid a £200 securing deposit and a further £1400 in cash. So the total we put down was £5100 which brought the price of the car down to £7295.
We took out a 3 year HP finance for this with Blackhorse.

Now here is where the plot thickens.. The sales person advised us about GAP and RPP Insurance and stated that in the even of a total loss, there would probably be a shortfall from the Insurance payout which would have to be paid back to the Finance Company. They also offered us an extra year Warranty at a discount.

The said it would cost £259.00 for the GAP + RPP and £200 for the extra years Warranty.

We had nothing left so we asked if we could just deduct the amount from the £1400 and change the Loan repayments. They said it would push the premiums up by quite a bit and it would be easier just to add it to the Loan and leave the £1400 as part of the deposit.

We were then shown the agreement which you had to have a degree in Maths to understand (D = A+B-C*A1 +B2) etc etc. They had also added the full cost of a 3 Year Warranty as a separate package and said they had to show it in the sale but the 2 years are included in the price of the car. So we were paying for 2 separate products 1. The Car and 2. The Warranty + GAP+RPP (which totaled £958 + Interest)

We signed the agreement and that was that and started paying on the 11th March 2014.

Boxing Day 2015 Disaster!!

We were flooded and as well as losing the downstairs of the house, we lost both cars on the Driveway!! Copart came and collected the car for assessment and we got the letter from Blackhorse demanding we continued payments until it was settled. They gave us a settlement figure of £3809.

Copart came back with an assessment amount of £9000!!! (that's £1706 more than what we bought the car for and this was nearly 2 years after buying the car)!!

I've since read that GAP is mainly sold as an advisory with Brand New cars because of their depreciation rate and is not much use to older cars (unless they are over a certain value).

So do you think I may have case here?

Sorry for the long winded post.

Thanks

[Deleted User]

No.

Claim on the GAP insurance to cover any difference between the settlement and the remaining finance.

Brains1969

Deleted_User wrote: »

No.

Claim on the GAP insurance to cover any difference between the settlement and the remaining finance.

There was no claim on GAP to be made as the remaining finance was only £3809 and we got paid out £9000 from the Insurance for a car we bought 2 years previously for £7295.

So why should I have had to buy GAP + RPP Insurance when the car was valued at way more than the Finance?

comeandgo

Car was always valued at more than your finance. Car value £12,395. Finance was about £8,000. You were silly to think you needed GAP insurance, it's only any use for new cars on full finance but you agreed to it.
I think the time that has lapsed, over three years since the pay out, you will not get any joy from The Car People.

Takmon

Brains1969 wrote: »

Hi all,

In 2014 we decided to buy a newer car and went along to the Ashton Under Lyne branch of The Car People and after a few hours, decided on a Citroen DS4 priced at £12395 with 2 years Warranty as a deal promise
We put our current car in as Part Ex and was offered £3500 for it. We also paid a £200 securing deposit and a further £1400 in cash. So the total we put down was £5100 which brought the price of the car down to £7295.
We took out a 3 year HP finance for this with Blackhorse.

Now here is where the plot thickens.. The sales person advised us about GAP and RPP Insurance and stated that in the even of a total loss, there would probably be a shortfall from the Insurance payout which would have to be paid back to the Finance Company. They also offered us an extra year Warranty at a discount.

The said it would cost £259.00 for the GAP + RPP and £200 for the extra years Warranty.

We had nothing left so we asked if we could just deduct the amount from the £1400 and change the Loan repayments. They said it would push the premiums up by quite a bit and it would be easier just to add it to the Loan and leave the £1400 as part of the deposit.

We were then shown the agreement which you had to have a degree in Maths to understand (D = A+B-C*A1 +B2) etc etc. They had also added the full cost of a 3 Year Warranty as a separate package and said they had to show it in the sale but the 2 years are included in the price of the car. So we were paying for 2 separate products 1. The Car and 2. The Warranty + GAP+RPP (which totaled £958 + Interest)

We signed the agreement and that was that and started paying on the 11th March 2014.

Boxing Day 2015 Disaster!!

We were flooded and as well as losing the downstairs of the house, we lost both cars on the Driveway!! Copart came and collected the car for assessment and we got the letter from Blackhorse demanding we continued payments until it was settled. They gave us a settlement figure of £3809.

Copart came back with an assessment amount of £9000!!! (that's £1706 more than what we bought the car for and this was nearly 2 years after buying the car)!!

I've since read that GAP is mainly sold as an advisory with Brand New cars because of their depreciation rate and is not much use to older cars (unless they are over a certain value).

So do you think I may have case here?

Sorry for the long winded post.

Thanks

The agreement probably wasn't that complicated i just think your just not very clever, especially considering that you think you only paid £7295 for a car that you actually paid £12395 :rotfl:

You really need to make sure you understand these things and think logically before signing agreements and buying extra insurance. Take someone else with you if you find these things confusing.

Brains1969 wrote: »

There was no claim on GAP to be made as the remaining finance was only £3809 and we got paid out £9000 from the Insurance for a car we bought 2 years previously for £7295.

So why should I have had to buy GAP + RPP Insurance when the car was valued at way more than the Finance?

Brains1969

lostinheaven wrote: »

£259 + £200 = £459... yet you go on to say it added £958 to your finance. Why?

They added the full cost of the 3 Year Warranty (£699) to the GAP&RPP (£259) = £958

lostinheaven wrote: »

It depends on the type of GAP insurance that you were sold.

You bought the car for £12,395. You only financed £8,253 at the most. £7,295 of which was related to the car specifically

This being the case, if you bought just Finance GAP insurance (designed to pay the difference between your motor insurance payout and the settlement figure of the finance agreement at the time of claim) then you were almost certainly mis-sold a policy that was unsuitable for your needs. The chances of you ever being in negative equity on that finance agreement (owing more than the vehicle was worth) were incredibly slim from the outset and a GAP insurance payout was almost certain to never be required.


If however, you bought Invoice GAP insurance (or a combined Finance & Invoice GAP insurance policy that most motor dealers would have been selling back in 2014) then this policy was designed to pay the difference between your motor insurance payout and the original invoice price that you bought the vehicle for.


E.g. if your motor insurer paid out £9,000 you would have had a GAP insurance claim for the £3,395 shortfall between the £9,000 and the £12,395 that you bought the car for.


Incidentally, in the GAP insurance "world", RPP is known to stand for "Retail Price Protection" (aka "Invoice GAP insurance"). However as you referenced both "GAP" and "RPP" I'm unsure as to whether this might be the case or not.

I can see now that I had 2 different types of insurances:

1. GAP for financial shortfall in the event of a total loss which is the difference between the amount paid out by the Insurance and the settlement figure from Blackhorse (BH). Which to me was useless because of the huge difference in payout (£9000) to settlement (£3809) which meant £5191 in my favour = No GAP.

1. RPP (Retail Price Protection) - This is where I've messed up as I can see now. As you mentioned, this pays out the difference between the original purchase price (although Car People only set the Claim limit to £10000) and the Insurance Payout (£9000). Which meant I would get back £1000.

Small addon to this..

This was my first financed car for over 15 years after getting through some debt problems. The Salesman was pushing the insurances on me saying they would help to get the finance accepted. I even had to fill in a questionnaire with him and after this he said I would definitely need both Insurances.

Yes I was naive and lessons have been learnt.

lostinheaven wrote: »

If you bought Finance GAP insurance off the back of advice from the salesperson, get a complaint submitted - it was almost certainly never suitable for you.


If you bought Invoice GAP insurance and never used it... get a claim submitted. You'll have breached the claim notification period no doubt but, the insurer is not allowed to reject your claim IF they've not been prejudiced by the delay. E.g. if they would have paid you back then, they still have to pay you now.


I hope this helps.

Absolutely, thanks for taking the time to explain it all. I doubt i'll get any joy from the RPP as the cut off was January 2017

Nearlyold

This is where I've messed up as I can see now. As you mentioned, this pays out the difference between the original purchase price (although Car People only set the Claim limit to £10000) and the Insurance Payout (£9000). Which meant I would get back £1000.

No the claim limit means the maximum amount (to cover the GAP) they'll pay out is £10,000, your GAP was £3,395 which is what they would have paid you as it is well within the limit.