PCP and car insurance

Tammi12

Hi, not sure if this is in the wrong place - apologies if so. I was involved in an accident back in December which wasn’t my fault, and my car was written off as a result. The car was purchased through PCP. My insurance company have valued the vehicle at just over £24,000 when the market value is currently approx £29,000. When I queried this they said they are not obliged to pay the market value as the car was purchased on finance, all they are required to do is put me back in the same position I was before the accident. They have paid the outstanding finance amount of £17,000. We paid a deposit of £8000 for the vehicle which is what they are prepared to pay back minus a percentage for each month we had the vehicle and minus the policy excess. I’ve never had a car on finance before so I don’t know if this is correct! Any advice would be much appreciated! 

[Deleted User]

Did you not take out GAP insurance? If not, you might be able to haggle a but on the sum but they are correct that they have to put you back in a position that you were before - question is, if it's a new car worth that much but it was written off, why are they not giving you a new one? Many policies replace a new car with a new one in the first year in the event of a write off.

Grumpy_chap

Tammi12 said:

Hi, not sure if this is in the wrong place - apologies if so. I was involved in an accident back in December which wasn’t my fault, and my car was written off as a result. The car was purchased through PCP. My insurance company have valued the vehicle at just over £24,000 when the market value is currently approx £29,000. When I queried this they said they are not obliged to pay the market value as the car was purchased on finance, all they are required to do is put me back in the same position I was before the accident. They have paid the outstanding finance amount of £17,000. We paid a deposit of £8000 for the vehicle which is what they are prepared to pay back minus a percentage for each month we had the vehicle and minus the policy excess. I’ve never had a car on finance before so I don’t know if this is correct! Any advice would be much appreciated! 

How old was the car?  Insurance policies often include cover to replace total loss claim with new replacement if the car is less than a year old.

The insurer is correct that they are only required to put you back in the position you were before the incident.  That requires an agreement on the market value, £24k or £29k or inbetween.

I am confused by what the value of the car is / was.  You say outstanding finance £17k plus deposit £8k = £25k then the insurer wants to deduct an amount for each month of beneficial use, but have you not made monthly payments in that time also?

How did you assess the market value to be £29k immediately before the accident?

Sandtree

The insurers are required to value the car as it was a second before the accident. 

From that number they then deduct your excess. If there is outstanding finance then they must pay towards that first, if the valuation net of the excess is more than the finance you get the rest.

How old was the car? Is the £29k what you think the secondhand value of the car was a second before the accident or the retail price you bought it for?

Tammi12

Thanks for the replies. The car was less than a year old. I do have GAP insurance, I will look into claiming on that. I will check the policy in regards to a replacement vehicle. The 29k is what the salesman at the dealership told me it will cost for a similar vehicle if I were to buy one today. I paid £26k for the car but prices have increased since then! Thanks again 

Sandtree

Most insurers offer new car replacement for the first 12 months as long as you are the first registered keeper of the vehicle. However as this vehicle was on PCP it would require the finance company to agree to it too and not all do. In the absence of the finance company's agreement it reverts to a standard total loss based on market value at the time of the accident... which could be more than the replacement value any given the strange times we find ourselves in.