I had an accident while renting a vehicle from a friend

onyxmontana

My friend had a motorcycle which he wasn't using and he had trouble making the monthly payment of £70.

He offered it to me on the basis that I pay him the equivalent monthly amount as a rental fee.

I agreed and paid £70 x 3 for three months rental on November 1 2019.

I was made the registered keeper of the vehicle and I then taxed and insured the vehicle.

In December I had an accident which was the 3rd parties fault and the insurance has declared it a 'total loss' and will make a payout for the vehicle of £1500.

The 'friend' has essentially been quite unpleasant throughout and demanded several different figures from me and made various threats but has now given the ultimatum of me either paying the outstanding finance balance of £1200 'immediately' and he will transfer ownership and provide evidence of the finance being settled. Or....

Should I decide to not do this 'immediately' then he expects that I should be liable to pay the exact outstanding finance balance if the payout is below the figure and then also if the payout is above the finance balance for me to pay this plus any excess amount I receive from the insurance payout (Currently a £300 difference between value and outstanding balance).

I haven't responded as I'm not sure whether I should just continue paying the monthly figure of £70 (due next February 1 2020) or if he is entitled to the outstanding balance plus any excess paid to me. I feel like the £1200 figure of the outstanding finance balance should be paid directly to the finance company and for him to transfer ownership.

I'm aware that he has likely breached his finance agreement by basically sub-leasing the vehicle to me so I don't believe he has much of an upper hand should this be taken to court.

Unsure if this is the correct forum to seek advice or whether I should consult a solicitor.

Kind regards

Mercdriver

The finance house own the bike until the final payment is made so they should have received the funds directly from the insurer.

missile

Presumably you were insured? The insurer should pay the current value of the bike. This might be significantly less than the finance.

Your "friend" was an idiot to lend / hire you his bike and unless you honour the gentlemen's agreement he will be liable for the loss.

Mercdriver

Transfer the money to him via BACS. That way there is a data trail. On no account give him cash, even if he says he will give you a receipt. If he doesn't pass the money on, that's his problem.

AdrianC

onyxmontana wrote: »

My friend had a motorcycle which he wasn't using and he had trouble making the monthly payment of £70.

He offered it to me on the basis that I pay him the equivalent monthly amount as a rental fee.

I agreed and paid £70 x 3 for three months rental on November 1 2019.

I was made the registered keeper of the vehicle and I then taxed and insured the vehicle.

In December I had an accident which was the 3rd parties fault and the insurance has declared it a 'total loss' and will make a payout for the vehicle of £1500.

Which is, we take it, an appropriate value for it, right?

The 'friend' has essentially been quite unpleasant throughout and demanded several different figures from me and made various threats but has now given the ultimatum of me either paying the outstanding finance balance of £1200 'immediately' and he will transfer ownership and provide evidence of the finance being settled.

That seems very fair. I mean, you do have the insurance payout and everything... and the financier will be on his back to pay the settlement figure.

I feel like the £1200 figure of the outstanding finance balance should be paid directly to the finance company

Right, and? Yes, your insurer should have done that if they'd known of the finance on the bike. Since they don't, you pay the financier.

and for him to transfer ownership.

He doesn't have anything to transfer. You were the RK of the bike, it will be transferred to the insurer. The financier were the legal owner, it will be transferred to the insurer.

Norman_Castle

onyxmontana wrote: »

Should I decide to not do this 'immediately' then he expects that I should be liable to pay the exact outstanding finance balance if the payout is below the figure and then also if the payout is above the finance balance for me to pay this plus any excess amount I receive from the insurance payout (Currently a £300 difference between value and outstanding balance).

Is the problem you resent your friend getting £300 more than the £1200 it will cost to repay the finance company? Give him the £1500, it is not your money.
What kind of "friend" are you?

Pension_Geek

Norman_Castle wrote: »

Is the problem you resent your friend getting £300 more than the £1200 it will cost to repay the finance company? Give him the £1500, it is not your money.
What kind of "friend" are you?

Presumably a former friend.

foxy-stoat

He probably thinks you are going to take the £1500 and not pay the finance off.

Assuming the insurers pay you directly that is.

If your claiming direct from the third party you should have no problems, if your claiming on your own policy and didnt tell them that you are not the legal owner then they may not pay out at all.

Good lucks

Jumblebumble

Norman_Castle wrote: »

Is the problem you resent your friend getting £300 more than the £1200 it will cost to repay the finance company? Give him the £1500, it is not your money.
What kind of "friend" are you?

The friend cannot expect to receive both the full £1500 and £70 a month for February as the OP no longer has use of the bike
However the friend may have lost what ever deposit he put down on the bike so the equitable solution is £1430

Mercdriver

Jumblebumble wrote: »

The friend cannot expect to receive both the full £1500 and £70 a month as the OP no longer has use of the bike

Why not? Don't the lease companies do exactly this?

Jumblebumble

Mercdriver wrote: »

Why not? Don't the lease companies do exactly this?

Do they if they receive a substantial increase on the finance owing?
I would suggest that the lease companies usually receive less hence the market for gap insurance
I don't think this scenario is a lease in any case as if it was the lease company would likely be the keeper