Stolen Lease Car- settlement query

rthompson2854

Hi All

My brand new leased car was stolen 2 weeks ago. I had had it for 3 months.

I put £2200 initial payment down to reduce my monthly payments across the 3 year period.

My insurance have said that they will either pay market value or the financial settlement figure, whichever is lower. The lease have said £21000 ±VAT is owed. My research suggests this car is worth between £28‐30k. So the insurance is paying the finance amount which is lower. This means they will not consider the £2200 i paid up front.

I am now left without funds to purchase another lease car and £2k down (which is alit of money to me).

In addition the lease company have taken payment for the next month's rent because it had already been put into they system, even though the car was stolen before the following months dates. They will not refund this and said to ask my insurance. Insurance passed me to them in first place.

Does all this sound right?

Mildly_Miffed

Hold on, I can't quite read the terms of either your policy or lease from here.

But… yes.

The lease has ended. The car no longer exists. The lease terminates.
Your up-front payments are part of the lease contract. Of course you don't get those back, any more than you would at the end of the term.
Your contractual payment that was already in process is paid, and reduces the outstanding debt, which is what the insurance are paying.

Be thankful you don't need to consider whether you had the foresight to take out a gap policy, because the car was worth less than the debt, because the shortfall would have been up to you to make good - that's what gap insurance is for.

If £2k is that important to you, I'd suggest not leasing a brand new £30k car, but buying one that better suits your pocket.

facade

If you had bought gap insurance, any potential "extra" money would not have gone to you, as you are not the owner of the car. On the other hand if there was a shortfall between value and finance settlement, gap insurance would have paid it and you walk away owing nothing.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6673545/stolen-lease-car-settlement-query

There are several different ways Motor insurance can be written in relation to vehicles on finance. Certainly one of them is simply to pay off the finance if it is lower than the market value of the vehicle. Plus £21,000 + VAT is £25,200 plus your excess of £500 = £25,700 so not that far off of your £28,000 valuation.

As others have said, its hard to read your motor insurance policy from here, but it should be clear what happens when its on finance and you just need to check their proposal is inline with the wording. Obviously ideally you would have checked beforehand.

The other two common models are:

1. Full market value less excess is paid to the finance company, its up to them what happens to any amount above the settlement amount
2. Finance settlement amount paid to the finance company, anything leftover from market value less excess is paid to the policyholder

Needless to say if you are buying the cheapest insurance you can find then its most likely the model you have… there is a reason why cheap insurance is cheap

Keep_pedalling

If you must have another new car, lease a lower value one (and less desirable to thieves) with the minimal one month initial payment.

born_again

A learning for the future. That GAP is required for a lease. If this had happened after a year, then you could end up still paying for the car, if the ins payout was less than settlement figure.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82044785#Comment_82044785

Standard GAP insurance would not cover the initial down payment for that you would need to add deposit protection. I am on my first leased car and have not bothered with GAP insurence.

born_again

https://forums.moneysavingexpert.com/discussion/comment/82045025#Comment_82045025

Nothing will cover the 1st payment.

Dave_5150

https://forums.moneysavingexpert.com/discussion/comment/82045047#Comment_82045047

There is definitely an option to add Initial Rental Cover to ALA GAP policies for leased / personal contract hire vehicles

Frozen_up_north

My LV policy has the following wording in relation to a stolen or written off new car for the first year of ownership. The situation may not be so straightforward when a lease car is involved. I guess with a lease, you are not the registered keeper.

—————----

If you or your partner bought your car from new, have had it for less than a year and you or your partner are the first and only registered keeper and either:

the estimated cost of repairing it is more than 50% of the manufacturer’s list price (including taxes and accessories) when the damage or loss happened; or it’s stolen and not recovered

we’ll replace your car with a new one of the same or similar specification

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82045741#Comment_82045741

Correct, some will allow a new car replacement on leases however the lease company has to agree to accept the new car and from experience most would rather the money.