GAP insurance and Finance Company, and me stuck in the middle :(

Frozen_up_north

Keep_pedalling said:

You would not normally have to fall back on GAP insurance for a write off in the first 12 months as the insurence companies usually pay out on the as new price. 

Dealers used to push GAP insurance as they must have been making a lot of money from selling it. My car insurance is "new for old" replacement in the first year of new car ownership. My car was an outright purchase, no idea about lease/HP/PCP.

born_again

Who was your insurance with?
As many pay full price within the 1st 12 months on a write off.

DullGreyGuy

Keep_pedalling said:

The lease companies action on this is very strange they seem to have technically turned a write off into something far more complicated. You would not normally have to fall back on GAP insurance for a write off in the first 12 months as the insurence companies usually pay out on the as new price. 

You say this was a new Mokka EV, but these have a minimum list price of £24k not £14k.

New Vehicle Replacement typically requires the car to be under 12 months old, that its the first registered keeper and the vehicle owner agrees. 

Its not clear from the OP if it was brand new or a nearly new car given they say it was:

1haterbs said:

born_again said:

1haterbs said:

I am in need of some advise, maybe somebody has been through the same situation I am in currently.

It was my first time taking out a lease car, and I was advised to get GAP insurance should the worst happen, a few months into the lease and the car was in an accident and sadly was classed as a total loss, my Insurance company dealt with the finance company and paid them just under £10k, this would have been move at 14k but the finance company wanted the car back, so the insurance company deducted this 4k value from their settlement.

The Finance company then came to me with a settlement shortfall of approx £2.5k, I thought simple, and there is where the GAP comes in and pays off this shortfall, but no.........the finance company have said that this amount due is classed as the following

Early termination charge (due to vehicle value deprecation)

And the GAP insurance are saying their only liability is not for the following

Any additional costs within the insurance settlement for anything other than the purchase of the motor vehicle. This includes, but is not limited to, administration charges, option to purchase charges, late payment charges and arrears, early settlement charges.

I am left really confused, the GAP insurance are telling me that the finance company are at fault here and in their words;

We do not cover any additional charges. This additional charge is something that XYZ have decided to charge you through no fault of your own and we have not come across this before.

We would suggest you contact The Financial Ombudsman about this charge as there is no mention of this in your finance agreement and going by the reviews on Trustpilot this company have had a series of disputes on this very subject.  

Anybody else been in this situation?
Regards

Seems a very low valuation for a car on lease?

Was this a new car?

Yes, new car, only 8 months old

Where these things often fall down in leasing however is that the lease company decline the new vehicle replacement and so instead it turns into a standard total loss settlement based on the value at date of loss. 

mikrt

I bought GAP insurance for my new car. It is stated in bold that the Gap company should be involved before any settlement is made with the insurance company.

Maybe they could have argued with insurance company before costs were finalised and this is the issue?? 

1haterbs

DullGreyGuy said:

Keep_pedalling said:

The lease companies action on this is very strange they seem to have technically turned a write off into something far more complicated. You would not normally have to fall back on GAP insurance for a write off in the first 12 months as the insurence companies usually pay out on the as new price. 

You say this was a new Mokka EV, but these have a minimum list price of £24k not £14k.

New Vehicle Replacement typically requires the car to be under 12 months old, that its the first registered keeper and the vehicle owner agrees. 

Its not clear from the OP if it was brand new or a nearly new car given they say it was:

1haterbs said:

born_again said:

1haterbs said:

I am in need of some advise, maybe somebody has been through the same situation I am in currently.

It was my first time taking out a lease car, and I was advised to get GAP insurance should the worst happen, a few months into the lease and the car was in an accident and sadly was classed as a total loss, my Insurance company dealt with the finance company and paid them just under £10k, this would have been move at 14k but the finance company wanted the car back, so the insurance company deducted this 4k value from their settlement.

The Finance company then came to me with a settlement shortfall of approx £2.5k, I thought simple, and there is where the GAP comes in and pays off this shortfall, but no.........the finance company have said that this amount due is classed as the following

Early termination charge (due to vehicle value deprecation)

And the GAP insurance are saying their only liability is not for the following

Any additional costs within the insurance settlement for anything other than the purchase of the motor vehicle. This includes, but is not limited to, administration charges, option to purchase charges, late payment charges and arrears, early settlement charges.

I am left really confused, the GAP insurance are telling me that the finance company are at fault here and in their words;

We do not cover any additional charges. This additional charge is something that XYZ have decided to charge you through no fault of your own and we have not come across this before.

We would suggest you contact The Financial Ombudsman about this charge as there is no mention of this in your finance agreement and going by the reviews on Trustpilot this company have had a series of disputes on this very subject.  

Anybody else been in this situation?
Regards

Seems a very low valuation for a car on lease?

Was this a new car?

Yes, new car, only 8 months old

Where these things often fall down in leasing however is that the lease company decline the new vehicle replacement and so instead it turns into a standard total loss settlement based on the value at date of loss. 

Sorry, yes, brand new car, it was only 8 months into the lease when accident happened, hence 8 months old

1haterbs

ok, so an update on this very strange one........the finance company have been dreadful since day one and here is the latest after a long phone call with the total loss team earlier.....pasted as is with all their spelling mistakes, their spelling is as good as their customer service!!!!!

Good morning,

 Thank you for your time on the phone earlier, as discussed I have reviewed your account and the total loss settlement calculation, the settlement our representatives have pursued and agreed with your insurance company is higher than our original valuation, I have reviewed and re-calculated the early termination fee based on the agreed pre-accident value and can confirm that based on the value agreed we can reduce the early termination fee to £0.

 I will shortly be raising a mannual credit to your Alphabet account for the early termination fee billed  of £2,448.67, meaning that the total shortfall amount applicable is your policy excess dedcution of £150.

Thank you for your patience while we resolved the claim, I hope that this is a positive outcome for you

If there is anything further I can assist with please do contact me, I’ll be happy to help.

Enjoy the rest of your day,

So never mind the stress this has caused me, Enjoy the rest of your day.

Can you imagine if they had already taken the amount from my bank account the hassle of getting it back!!!

Hoenir

Keep_pedalling said:

You say this was a new Mokka EV, but these have a minimum list price of £24k not £14k.

What value was the vehicle insured for ?  £14k is nearer the replacement cost of a 2023 model. 

1haterbs

When I took out the insurance the value was 37k I think

1haterbs

It looks to me like the finance company were trying to pull a fast one, not sure if honest mistake or fraudulent though. So

finance company came up with settlement value of £12,397.79

admiral came back to them with ok, we will pay what we believe the cars market value is at £14,849.44 - what we believe the scrap page value is as you want the car back which is £4,900.32, plus my excess of £150 so final payment from admiral was £9,799.12

so then the finance company came after me for the difference between £9,799.12 and 12,397.79, ignoring the fact they also had the car back with a value of an estimated £4,900.32 (probably a lot more otherwise why would they want it back?)

does the above like like an honest mistake or fraudulent? I’m currently signed off work with stress and this over the last few weeks has given me sleepless nights and pushed my stress levels to the edge, should I speak to the financial ombudsman about this?

Wonka_2

1haterbs said:

does the above like like an honest mistake or fraudulent? I’m currently signed off work with stress and this over the last few weeks has given me sleepless nights and pushed my stress levels to the edge, should I speak to the financial ombudsman about this?

At this stage given they’ve corrected it then it doesn’t matter - and overthinking it isn’t going to help your stress levels. 

Ombudsman wont be interested now it’s resolved and if you want to fight for an apology from anyone it’s unlikely to be forthcoming in any meaningful way. 

File the experience away and concentrate on getting better.