PCP & insurance due to write off & settlement issue

EwartV

I wondered if someone can help. I was recently hit by a tree whilst driving, it jas written my car off, a second earlue I would be dead. I have soft tissue damage. But my I strange have 2 payouts;

1 - finance settlement with market value payout pre accident, finance company paid and rest to legal owner( no one is eve legal owner u til 100% paid) finance company say they should pay market value and they will credit me difference if insurance are being awkward. 

2 - hire/lease agreement they will settle finance and that's it 

They are treating mine as a hire/lease which is isn't. I cannot afford to lose the money as was in final 6 months of my PCP. My car is worth £15,500 if to buy like for like and I owe £7132.

I have sent a 9 page document with evidence, also co formation from finance but hae now been told to wait a further 2 weeks.....

Has anyone any advice as PCP is personal contract purchase.

The distress is awful, I don't think I have even had time to think of my accident as this has sucked everything out of me.

Many thanks, vicki

Sandtree

Normally you hit a tree rather than the tree hitting you as its the stationary item but guessing this was a falling tree in the storms?

Insurers will go one of two ways, get a settlement figure from the finance company and if its less than the total loss valuation then they'll pay off the finance and give the remainder to you... others simply pass the full amount to the finance company with the expectation that they will forward on anything above the settlement figure to you.

Have your insurers informed you of the total loss figure? Have you spoken to the finance company for a settlement figure? At least that way you know if you're expecting monies back

Goudy

I think you might have your information a little twisted.

If your car was on a PCP or even HP and was written off, your insurance will pay the market value your car was worth on it's pre accident condition.
Now where and how much they pay this to depends on the market value and how much you still owe.
With PCP and HP there is a chance that the car is worth more than you owe, so the insurance will settle the finance first and pay the rest out to the you (you would be considered the legal owner as the HP/PCP contract had been settled by the insurance company)
If the market value is less than you still owe, you will still owe this shortfall to the finance company after the insurance has settled the finance.

If your car was leased/PCH, things tend to work a little differently.
The insurance will pay out the market value to the leasing company.
As you are not the owner or purchaser on finance of the vehicle you have no claim to any value of the car.
The best case scenario is the insurance settlement covers the value of the car and covers any likely value to them lost from ending the contract early.
Quite often though there is short fall between the settlement and the vehicles value (car and contract value) which will still be your responsibility unless there was a form of shortfall insurance in the contract or your contract has a waiver clause on total loss claims.

Obviously your contract itself will determine want type you have, PCP, HP, PCH etc but your insurance company will want to know or any interest anyone else might have in the vehicle as well, they won't just pay you out to settle anyone else with a say in the vehicle unless it have been purchased on a personal loan.

MX5huggy

A 9 page document! Of course it’s going to take time to consider the consequences of such a detail. 

EwartV

Hi. Tq for your responses but atoll need help.

So insurance have now come back saying that as I am not the legal owner, (you never are on a car loan, hp or pcp until final payment) that they will only pay the finance settlement and not the market value as it is lower. Finance £7k vs market value of £15k, this can't be right? I had purchased gap insurance but only valid 36 months,  I am at 42 months of 48 contract.

They are saying I am not the right to title. Surely this is wrong as that means anyone I sure with them with finance is not insured for the market value, only ever the outstanding finance? 

If they paid settlement it would mean I would be the legal owner of the lump of now metal which means they should pay the market value and as they then settle it I can then send them the V5c document.

Am I missing something? £9k is a lot of money to lose and I don't know where to turn? Many thanks

[Deleted User]

Probably worth confirming a few more details about how you came to the £9k gap in the PCP finance and market value of the car.

It is unusual for a car to be worth more than double the outstanding finance near the end of a PCP deal.

What model of car / age / mileage is involved here and where have you got the market value of £15,500 from? Are you sure that is the value of your car the day before it met the tree rather than a new value?

If your remaining PCP is £7,132, does than include both your remaining 6 months of payments and the balloon payment / GMFV?

Seems odd really because the GMFV is usually fairly close to market value, usually a bit less but not massively. Just guessing with numbers here but at 4 years old a car is usually worth 50% of original price - doesn't really stack up given you have 6 months of payments to knock off the £7,132 leaving maybe £5-6k of GMFV suggesting the car was only worth about £12-14k when new?

Either way, car insurance will pay market value unless the terms specify otherwise and normally your insurance document will give either a specific value for the car or say "market value". Only exceptions are with insurance that is including with PCP such as that offered by Peugeot / Citroen which may actually be different and just cover the outstanding finance.

EwartV

Thanks @[Deleted User] , a garage jas told me the trade in price for my car is £12,800, and that the forecourt price would be approx £15-£15,500. 

I had aired with caution and thought if I got at least the trade value I would be OK for a deposit of £5k worst case.

The market value is me buying a like for like vehicle. I researched autotrader and car giant. The insurance haven't even given me  market value which I find strange.

It is  peugeot 2008 gtline 2018 with 42,000 on it. I had taken gap insurance too but have been told that finished at 36 months in December 2021, although I have gone back to look and it states that months 37 to 60 would be covered at market value less the finance settlement, not the purchase value. I was told I wasn't entitled to anything when I had called straight after accident but am now wondering surely they should pay the shortfall, my insurance are saying settlement only so surely they should pay the shortfall?

I am exhausted with all this, I can't sleep, am in so much pain and am back at work tomorrow. Any help is much appreciated.

[Deleted User]

I think you will probably need to check the terms of you insurance as I'd expect them to pay out market value. 

Is it the Peugeot "Just add Fuel" finance package? I recall the inclusive insurance had some clause about paying the finance off only but can't find a link to it now.

iwb100

Deleted_User said:

Probably worth confirming a few more details about how you came to the £9k gap in the PCP finance and market value of the car.

It is unusual for a car to be worth more than double the outstanding finance near the end of a PCP deal.

What model of car / age / mileage is involved here and where have you got the market value of £15,500 from? Are you sure that is the value of your car the day before it met the tree rather than a new value?

If your remaining PCP is £7,132, does than include both your remaining 6 months of payments and the balloon payment / GMFV?

Seems odd really because the GMFV is usually fairly close to market value, usually a bit less but not massively. Just guessing with numbers here but at 4 years old a car is usually worth 50% of original price - doesn't really stack up given you have 6 months of payments to knock off the £7,132 leaving maybe £5-6k of GMFV suggesting the car was only worth about £12-14k when new?

Either way, car insurance will pay market value unless the terms specify otherwise and normally your insurance document will give either a specific value for the car or say "market value". Only exceptions are with insurance that is including with PCP such as that offered by Peugeot / Citroen which may actually be different and just cover the outstanding finance.

Have you seen the second hand car marker recently? It’s bonkers. Two year old car my wife bought for £24K 7000 miles on it. We just sold it for £23,500 to a dealer.

Was in a dealers at the weekend and they were paying a guy more than he paid for his new car 6 months ago. So in 6 months of ownership his car went up in value. 

You can’t use normal depreciation right now. But the owed amount does seem odd even factoring that in. 

I suspect what is happening is the insurance company is just using a normal depreciation calculator because as I’ve said above market value is a bit silly right now. And because market is competitive it’s a little more subjective. Dealers will for some cars pay hugely over the odds but not sure how an insurer would value this given they have nothing to sell and hence what a dealer would pay for a trade in is more subjective currently than based on the usual calculations. 

If the OP could post the mileage and make model with engine size etc we could look at what market value might be to check. Market value really would be what you could sell for to the trade I think.

Goudy

Deleted_User said:

Is it the Peugeot "Just add Fuel" finance package? I recall the inclusive insurance had some clause about paying the finance off only but can't find a link to it now.

This was my thinking as well.
Peugeot did offer "Just add fuel" and "Passport" schemes.
(these days it's different and called a "PCP - Just add fuel")

I seem to think both these schemes were personal lease contracts, with the "Passport" version having an option that let you swap to a new car at the end of the contract or buy the car for a pre set amount built into the contract.

This "Passport" scheme made it look very much like a PCP contract rather than a straight lease hire due to the optional buy it payment.

There has been a few that didn't quite get the scheme and they thought is was some sort of conditional sale type of finance product, which is wasn't.

Maybe the OP has this type of contract which is why the insurance company are saying they have no rights to any value in the vehicle and they will only pay out the lessor.