Hp car written off, no GAP.

Dzyk

Hi and thanks for the privilege to can ask here. 
I was involved in a car accident and my car was written off ( hp finance, no Gap) the case is settled and im not fault. The valuation for the car dont cover all the finance debt, can i make a claim for the rest of debt? Because is totally lose for me, out of pocket with couple thousands. Thank you. 

oscarward

I'm sure wiser ones will be along soon but my understanding is

The insurance will pay out the cars pre accident value. I think the doctrine is that you will be put back to the position you were before the accident. Either repair the car or pay out the market value whichever is the cheapest. The fact you had HP of more than it's worth is not their concern.  That's why GAP insurance is available.  If the insurers are aware of the finance they may pay the valuation direct to the HP company and then the HP people will come after you for  the balance.

you may be able to argue the market value they offer is low which will lift it out of the write off zone.

The only other way out is, if it's a cosmetic write off, to buy the wreck back off the insurers. Then continue to pay the HP and live with the dents or get it repaired cheaper. i.e. s/h parts.Then when the HP is finished sell the car at a reduced value as it has a write off marker against it.

MovingForwards

No you can't claim, the payout was only to cover the value of the vehicle at the time of the accident.

GAP insurance is offered / available at the time of purchase to cover the difference.

Dzyk

oscarward said:

I'm sure wiser ones will be along soon but my understanding is

The insurance will pay out the cars pre accident value. I think the doctrine is that you will be put back to the position you were before the accident. Either repair the car or pay out the market value whichever is the cheapest. The fact you had HP of more than it's worth is not their concern.  That's why GAP insurance is available.  If the insurers are aware of the finance they may pay the valuation direct to the HP company and then the HP people will come after you for  the balance.

you may be able to argue the market value they offer is low which will lift it out of the write off zone.

The only other way out is, if it's a cosmetic write off, to buy the wreck back off the insurers. Then continue to pay the HP and live with the dents or get it repaired cheaper. i.e. s/h parts.Then when the HP is finished sell the car at a reduced value as it has a write off marker against it.

I can understand that but im not in same position before the accident, i have no car and debts to pay. Is not any chance with a solicitor to make a unsecured claim?
Thanks for your reply. 

oscarward

But you would be in the same position.  Previously Car worth £x with a debt of £y.  Now you get cash £x still with a debt of £y.  

You just swap car for cash, the debt is nothing to do with the insurer.  Think of it as selling the car to the insurers or if you part exchanged for something else. Be exactly the same if you sold it. 

Otherwise you would get scrotes buying a banger with finance of 3 times its value and writing it off to claim the dosh.

have you tried talking to the finance company, they may be amenable to allowing you to use the cash from insurers to buy another car and keep the finance going? 

Or take on a new loan which will allow you pay off the outstanding finance and buy another car. Presumably ending the deal early may save some interest.😎

I’m not sure how the finance would work legally as it’s hp presumably secured against a car so the agreement may be ended by the write off. 

Dzyk

Thank you for your reply, i can understand the law, but is a bit unfair, because si possible to have to pay debts for another year or two and physically i cant drive my car for another two  years, is not economically for me to think im selling the car .The insurer have the power to say is not economically to repair the car but why i dont have the power to tell them is not economically for me to be paid for car beacuse i need my car or similar car. . The real problem is because the insurance is paying to the finance company, if the insurance can pay me for the car  i should have enough money to buy another one similar  to previous and my life is going like before the accident. Looks like with my insurance has insured the finance company not me personally . But the law is law. 

angrycrow

Look at it from the insurers point of view. Person A buys car for cash, car gets written off so insurer pays the value of the car and person A is back where they started. 

Person B can't afford the car so takes finance at a high interest rate to buy the car. Person B has a car worth the same as person A but also has a debt for the interest on the item they could not afford outright. Why should the insurer pay more to person B because person B bought a car they could not afford outright.

I know it feels unfair but it is why gap insurance exists.