Lease car write off/ claim question

shazam14

Hello everyone.

I recently wrote off my car in an accident. The vehicle was a 3 year PCH lease with no option to buy at the end and the accident was 11 months into my contract. I put down an initial 3.5k deposit and I was paying £433 per month.

The insurance company valued the car at around £28k which I accepted as fair, however the finance company only wanted £23.5k which I assumed reflected their valuation minus the amount I had already paid off(£3.5k + 11x£433 = £8356)

The insurance company paid the £23.5k requested by the lease company (minus my £700 excess)and then told me the matter was closed as I don't own the vehicle and therefore not entitled to any of the difference.

While that makes sense to me I just want to check if that is actually true. I probably would not have accepted the figure and pushed for repairs had I known I would be left short, considering I need to put another initial payment down for a new car if I want to lease another vehicle again. I'm also assuming the premium I was charged by my insurance company reflected the amount I would receive if my vehicle was written off.

Do I have any claim to the £5k difference or not?

Thanks

Goudy

It was never your car so the payment from the insurance company isn't yours either.
It's made to the legal owner, the lease company.

You've been paying to rent it, so the payments you have made already are just rental payments.

You wouldn't expect to hire a car for say Hertz, crash it and the insurance company pay out any difference to you would you?


If it was on normal finance contract they would have paid the finance company first and if there more than what you owed, you would have got that.

If it was negative, say you still owed more than the payout, you'd still owe the difference to the finance company.

Bigphil1474

Sounds like the car owners should have taken the £28k and given you the difference so you weren't out of pocket. Not sure if you can get them to do that now. 

Arunmor

I think this highlights one reason not to pay too high a deposit.  That is where you are losing out.  I leased a couple of cars back in the day and always opted for just 3 months deposit, in fact that was the norm 8-10 years ago.

DullGreyGuy

Your policy book should explain what happens to a settlement in the event the vehicle is on finance/lease 

Mildly_Miffed

shazam14 said:

Hello everyone.

I recently wrote off my car in an accident. The vehicle was a 3 year PCH lease with no option to buy at the end and the accident was 11 months into my contract. I put down an initial 3.5k deposit and I was paying £433 per month.

The insurance company valued the car at around £28k which I accepted as fair, however the finance company only wanted £23.5k which I assumed reflected their valuation minus the amount I had already paid off(£3.5k + 11x£433 = £8356)

The insurance company paid the £23.5k requested by the lease company (minus my £700 excess)and then told me the matter was closed as I don't own the vehicle and therefore not entitled to any of the difference.

While that makes sense to me I just want to check if that is actually true. I probably would not have accepted the figure and pushed for repairs had I known I would be left short, considering I need to put another initial payment down for a new car if I want to lease another vehicle again. I'm also assuming the premium I was charged by my insurance company reflected the amount I would receive if my vehicle was written off.

Do I have any claim to the £5k difference or not?

Thanks

No, you have no claim on the £5k - the insurer are recompensing the owner of the vehicle for the loss of it. You were not the owner.

No, you would have had no way of "pushing for repairs" - the insurer make the decision on whether to repair or write off, based on the cost to them.

You hired a vehicle for three years. The cost of that vehicle rental was ~£18,000 for three years, front-loaded by the higher initial payment. The vehicle ceased to exist, so the agreement was terminated.

If you read your lease and your policy, this will all be explained there.