Car finance mistake

teejay72

Hi. My son has/had finance on his car since April 2019 and unfortunately the car was written off last week. Now we know that the finance will need to be paid off once he receives the money for it but after having a conversation with them and thinking that the amount they are requesting is a little on the high side we’ve realised that they have actually added the amount of the interest on twice to the original paperwork. Just checking for advice on what we can do to make sure he gets a fair deal as what they are requesting is over what the insurance company is offering with this being added twice. All payments etc have been paid on time to what they worked them out to be.

AdrianC

The amount the insurer offer is totally unrelated to the amount he owes the financier.

Insurance will pay what the car was worth immediately before the collision. Depreciation is steep initially, so that will almost certainly be lower than the remaining amount on the finance. Gap insurance would have covered that shortfall.

That aside, obviously the financier need to provide a correct settlement figure.

Grumpy_chap

Does he have gap insurance?  I'm not a fan, but that would cover it.

Also, if there was an error on the original paperwork, has he been overpaying each month?

Nearlyold

teejay72 said:

Hi. My son has/had finance on his car since April 2019 and unfortunately the car was written off last week. Now we know that the finance will need to be paid off once he receives the money for it but after having a conversation with them and thinking that the amount they are requesting is a little on the high side we’ve realised that they have actually added the amount of the interest on twice to the original paperwork. Just checking for advice on what we can do to make sure he gets a fair deal as what they are requesting is over what the insurance company is offering with this being added twice. All payments etc have been paid on time to what they worked them out to be.

What makes you believe this?  Can you give us the figures, just wondering if you've assumed the interest would be evenly spread when you calculated what the amount owing would be?

teejay72

It’s there on the paperwork. It says car price, less deposit, plus interest, equals
then it has another section underneath that says this includes interest at % and then has the figure and added the exact same amount again.

teejay72

Grumpy_chap said:

Does he have gap insurance?  I'm not a fan, but that would cover it.

Also, if there was an error on the original paperwork, has he been overpaying each month?

Unfortunately not. Yes I believe he has been overpaying as they have would of worked out payments on the wrong figure.

teejay72

AdrianC said:

The amount the insurer offer is totally unrelated to the amount he owes the financier.

Insurance will pay what the car was worth immediately before the collision. Depreciation is steep initially, so that will almost certainly be lower than the remaining amount on the finance. Gap insurance would have covered that shortfall.

That aside, obviously the financier need to provide a correct settlement figure.

His insurance have offered what I believe is a fair price, mid range book price. On the figures the finance company have on the paperwork he won’t end up with a penny after paying finance back (will owe them £250), with the interest corrected he will end up with at least a couple of thousand. He has spoke to them this morning and they have admitted an error but waiting to hear how they going to correct it.

Herzlos

teejay72 said:

It’s there on the paperwork. It says car price, less deposit, plus interest, equals
then it has another section underneath that says this includes interest at % and then has the figure and added the exact same amount again.

Are you sure the interest is added twice or just mentioned twice?
What are the actual numbers?

Grumpy_chap

The over-payments each month should be taken off the capital owing.
It sounds very unusual, if you don't get anywhere with the finance company, it may be worth sharing a photo of the figures, with personal detail redacted.  Hopefully, the finance company will resolve this and no need for that - if they have admitted an error, they should be able to correct it simply enough.