PCP car finance new car replacement cover

empyreandeer

We were recently involved in a car crash and our car has been written off. We bought the car new with PCP finance and it was just less than one year old at the date of the crash. Our insurance includes new car replacement cover and as the car was less than one year old the insurance company has confirmed that we qualify for a new car. However the finance company won't accept the new car and we will therefore be left with the assessed market value, which will leave us with a shortfall against the amount of finance outstanding (we naively did not take out GAP insurance). Has anyone had experience of this situation and if there is any scope to get the finance company to change their mind?

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jimjames

empyreandeer said:

However the finance company won't accept the new car and we will therefore be left with the assessed market value, which will leave us with a shortfall against the amount of finance outstanding (we naively did not take out GAP insurance). Has anyone had experience of this situation and if there is any scope to get the finance company to change their mind?

Surely if you have replacement car cover there is no need to have GAP insurance so you haven't made an error

empyreandeer

jimjames said:

empyreandeer said:

However the finance company won't accept the new car and we will therefore be left with the assessed market value, which will leave us with a shortfall against the amount of finance outstanding (we naively did not take out GAP insurance). Has anyone had experience of this situation and if there is any scope to get the finance company to change their mind?

Surely if you have replacement car cover there is no need to have GAP insurance so you haven't made an error

Yes, that would certainly be correct if the finance company would accept the new car as a replacement for the written off one. But in this case they won't, so we are currently left with a market value insurance assessment that is less than the outstanding finance amount, so we will end up out of pocket.

neilmcl

jimjames said:

empyreandeer said:

However the finance company won't accept the new car and we will therefore be left with the assessed market value, which will leave us with a shortfall against the amount of finance outstanding (we naively did not take out GAP insurance). Has anyone had experience of this situation and if there is any scope to get the finance company to change their mind?

Surely if you have replacement car cover there is no need to have GAP insurance so you haven't made an error

He needs it for the very reason stated in his post. The terms and conditions of the car insurance new for old policy (in the first 12 months of a new car) usually state something on the lines that they will only replace if all known parties agree, and as the OP has discovered, not all finance providers will agree to this, particularly as the insurer takes ownership of the written off vehicle. 

The following might be worth a read:

https://gapinsurance.co.uk/blog/2019/01/01/the-perils-of-new-for-old-cover-v-2/

Considering how relatively inexpensive GAP insurance is there really isn't an excuse for not getting it on a financed vehicle.

AdrianC

The thing to remember is that a financed car isn't YOUR car. It belongs to the financier. It's entirely their choice as to whether to accept a replacement vehicle or whether to simply ask for the settlement value of the finance. What, precisely, do their Ts & Cs say anything about this situation?

There is no legal obligation on the insurer to provide the value of the replacement car where that car is declined, except in contractual accordance with the policy Ts & Cs. What's the precise wording there?
 
The insurer's only legal obligation is to pay out for the market value of the car immediately prior to the loss occurring. If that falls short of the settlement value, then that's precisely what a gap policy would cover.