Quotemehappy - Stolen car - confused.

rajeshk4u

"Applicable Excess: £500"

If you get a new car, will the insurance company let you put the new car on this policy, or did they cancel the insurance?

How many months did you have left on the policy?

Goudy

tasticz wrote: »

I remember a few months back there was a similar scenario to what op described however in that case the insurance company just cleared the finance on PCP and did not give any money to the policyholder.

Not sure what happened there but do let us know OP if the 7k hits your bank account.

This is likely due to how the car was financed.
Car deprecation isn't linear, they lose more in the first year and the second, more in the second than third and so on.

Finance payments are linear, each month you make a set payment.

So it's not unusual to owe more for a car on finance than it's actually worth at certain times.

Say you borrowed £20,000 (£23,000 with interest) for a new car, you drive it off the forecourt and it's worth £15,000 within a year, but you're only made 12 payments of £200, you still owe £20,600.

With a PCP deal, it's usually only in the last few months that you've paid enough to catch up with what the vehicle is actually worth.

In the case of a total loss claim before this point, you are usually left with a gap in the valuation as you owe more than the car is worth, which is where GAP insurance comes in. (if you've bought it)

Sometimes you may have borrowed less for the same car and this makes up the short fall.
You may have gotten a large deposit contribution from the manufacturer.

Now you may have borrowed something like £16500 (with interest) for the same car, paid less per month at around £160, so after a year the car's worth £15,000 but now you owe £14,580.

This is similar to what mine worked out at, though I also had a large slice of equity in my old car (PCP deal) that reduced the amount borrowed even further.
I bought a £20,000 car with £3500 contribution and £1500 equity in the last PCP deal I traded in.
It got stolen after 14 months and it was worth what I originally borrowed, but I'm made 14 months payments so I only owed slightly over £11000.
The insurance paid off the £11,000 and paid me the £4,000

This is one of the reasons manufacturers offer deposit contributions and don't discount the invoice price.
It keeps the invoice price high and doesn't !!!!!! up the used values but still gives the customer an effective discount.

rs65

foxy-stoat wrote: »

They pay out inline with their policy - some pay the full market value, settle the finance and pass the balance to the policyholder, while others pay out the outstanding finance, to the maximum of the market value, and thats it, that extract from the QMH policy document reads like the latter, no matter what the person on the other end of the phone said.

No insurer only pays the outstanding finance, to the maximum of the market value.

They pay the market value. Most will pay any finance off first and any surplus to the policyholder.

The QMH policy isn't well worded but it says they will pay the claim to the finance company (its then up to the finance company to pay any surplus to the policyholder). The reality, as indicated by the OP is the policyholder will get the surplus direct from QMH