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Clearing Finance after accident that was,nt your fault
CaroleSpring
Posts: 3 Newbie
in Motoring
Hi New here so not sure if this has been answered before.
My son bought a van for work on finance 3 months ago. Two weeks ago he was hit by another driver and the insurance company has not written the van off but not viable for repair as so much damage. He requested the settlement be sent to him so he could get the van repaired independently. The insurance company agreed to this via the phone which he was happy with. The next day the insurance company phoned to say the settlement was being sent to the finance company. This means he has no vehicle and is unable to work. He still has at least 7,000 left on his finance agreement and none of it was his fault.
Position now is no vehicle, no money -only debt and no transport for work . How can this be fair? He did not have gap insurance. Advice please.
Thank you
My son bought a van for work on finance 3 months ago. Two weeks ago he was hit by another driver and the insurance company has not written the van off but not viable for repair as so much damage. He requested the settlement be sent to him so he could get the van repaired independently. The insurance company agreed to this via the phone which he was happy with. The next day the insurance company phoned to say the settlement was being sent to the finance company. This means he has no vehicle and is unable to work. He still has at least 7,000 left on his finance agreement and none of it was his fault.
Position now is no vehicle, no money -only debt and no transport for work . How can this be fair? He did not have gap insurance. Advice please.
Thank you
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Comments
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It's fair because unfortunately it's what he signed up for. The insurance has paid out, but not having gap insurance has left - well, a gap.
He'll need to look at alternative ways of getting transport while paying off the finance. A further loan may be difficult given his current indebtedness, so a cheaper option would be the recommended route.1 -
What is the recommended route?
Thank you
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Buying something cheaper, alternative modes of transport, making an arrangement with a colleague, etc.
He needs to go through his options based on his circumstances and type of work.0 -
That's exactly what a write-off is, paying the value not repairing. Sounds like they've simply allowed him to keep the salvage, probably in return for a proportion of the pay-out. Cat N?CaroleSpring said:...the insurance company has not written the van off but not viable for repair as so much damage.He requested the settlement be sent to him so he could get the van repaired independently. The insurance company agreed to this via the phone which he was happy with. The next day the insurance company phoned to say the settlement was being sent to the finance company.
It has to be. They are the owner of the vehicle.This means he has no vehicle and is unable to work. He still has at least 7,000 left on his finance agreement and none of it was his fault. ... How can this be fair? He did not have gap insurance.
That's how insurance works.
The vehicle is written off, insurance's obligation is to pay the market value of the vehicle immediately prior to the collision.
If he owes more than that, then he was already in -ve equity debt on it, it's simply that the vehicle has been replaced by the cash. He still owes the same amount he did before.
Gap insurance would have resolved the problem, if he'd had it.0 -
What type of finance did he have? HP, PCP or? Clearly its secured on the vehicle as the insurers have identified it.
A cash settlement being made means its almost certainly been deemed a total loss, if he is retaining the salvage then the settlement value will have been reduced to reflect the salvage value (and the excess if he is claiming off of his own insurance). Depending on the finance agreement there may be limits on keeping the salvage, how it has to be repaired etc0 -
If he has the vehicle can't he get it repaired?CaroleSpring said:What is the recommended route?
Thank youRemember the saying: if it looks too good to be true it almost certainly is.0 -
This is simple your son didnt pay for the van the finance company did which makes them the owner and the insurance company are paying the market value to the rightfull owner ie: the finance company if there is a shortfall between the settlement figure and the insurance payout then your son needs to pay that.he may consider temporarily buying a cheap mpv such as a ford galaxy etc... and taking the seats out and just using that for now they are plenty big,my local delivery guy who works for Hermes does that for his (100) parcels as he said the prices of vans has shot up since covid and the tax and insurance is more on vans plus unlikely to be broken into unlike his past vans.“People are caught up in an egotistic artificial rat race to display a false image to society. We want the biggest house, fanciest car, and we don't mind paying the sky high mortgage to put up that show. We sacrifice our biggest assets our health and time, We feel happy when we see people look up to us and see how successful we are”
Rat Race0 -
He could buy the van back from the finance company and repair it. Thats likely to be a lot cheaper than trying to buy a replacement van in the current climate.AdrianC said:
He probably could if he had the insurance payout, which went to the financier...jimjames said:If he has the vehicle can't he get it repaired?
It sounds like he would need a (personal) loan to cover the buy back, repairs and negative equity, but that might not leave him any worse off overall (other than the van being registered on VCAR) than he was before this happened.2 -
How much was the van that after 3 months hes £7,000 in negative equity? That sounds like a severe amount. They "shouldnt" factor in much interest as they're legally obliged to base it on a settlement figure not amount owed.CaroleSpring said:Hi New here so not sure if this has been answered before.
My son bought a van for work on finance 3 months ago. Two weeks ago he was hit by another driver and the insurance company has not written the van off but not viable for repair as so much damage. He requested the settlement be sent to him so he could get the van repaired independently. The insurance company agreed to this via the phone which he was happy with. The next day the insurance company phoned to say the settlement was being sent to the finance company. This means he has no vehicle and is unable to work. He still has at least 7,000 left on his finance agreement and none of it was his fault.
Position now is no vehicle, no money -only debt and no transport for work . How can this be fair? He did not have gap insurance. Advice please.
Thank you
If the van was new, does his insurance not offer some sort of "new for old" in the first year?0
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