Car on finance written off.
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There are a couple of ways this can go, either the insurer will pay the finance co. directly and you will have to pay off the remaining settlement, if there is any, or they will pay you directly, in which case you will have to use it to settle the finance. You will not be able to buy a new car and keep paying the finance as normal, this finance deal is now dead and will require settling one way or the other.Ah ok clear on the suing part now.
So i believed that the insurance payout would be paid towards the finance company.
However if i am now understanding corrrectly, we receive the payment and buy a car for that value and then keep paying the finance as usual?
Appreciate all replies by the way.0 -
So you were heavily in negative equity anyway on the car - and all that's happened is that's been crystallised.Our car which was on finance at the time has now officially been written off.
The balance remaining over next 2 years is £7300.
The early settlement amount is £5500.
The value of the car being paid by our insurer is £3500.
That's what Gap insurance is for.
No.So is it possible to sue the driver for the money we are going to have to pay out now because of his fault?
Or does anyone else have any other way to approach this in respect to getting a new car from the finance company?
Insurance's responsibility is to put you back in the position you were in before the collision.
You had £3,500-worth of car.
That car has been destroyed.
You have the immediately pre-collision value of it instead.
You were in £2k of negative equity on the finance for it.
Settling that negative equity would be £2k of betterment.
You could use the settlement to buy a similar £3,500 car, and be in exactly the same position you were before the collision.0 -
Hi Dutr
I'm a bit new to all this and don't know how it works.
Sorry we have not had a figure quoted yet for what we are going to get for our car. I believe we are going to get that today.. I did a valuation of my car on webuyanycar.com and got approx £3500. So i believe his insurers pay that to our finance company and not directly to us.
Thanks
The insurance company should pay out a lot more than £3,500 which is the raw trade price.
They should pay out what the car is worth, in terms of what it would cost you to replace it with a similar car with similar miles.
See what they come back with, and let us know on here. There are next steps you can take if there is a shortfall to help bridge the gap if there is one.0 -
So you were heavily in negative equity anyway on the car - and all that's happened is that's been crystallised.
That's what Gap insurance is for.
No.
Insurance's responsibility is to put you back in the position you were in before the collision.
You had £3,500-worth of car.
That car has been destroyed.
You have the immediately pre-collision value of it instead.
You were in £2k of negative equity on the finance for it.
Settling that negative equity would be £2k of betterment.
You could use the settlement to buy a similar £3,500 car, and be in exactly the same position you were before the collision.
No. Thats the WBAC trade value, not the retail value of his car.
They should / will pay out market value for the car - two different things.
His car is worth a lot more than £3.5K on the open market and the offer made by the insurance company should reflect that.0 -
If that's it's trade value, then you can try and challenge the insurers valuation and say it would cost you X to buy it from a dealer or privately seller.
Try and find any adverts online that are similar to your car directly before the crash (trim, spec, mileage, age, condition) and use that to argue that the settlement should be increased. Hopefully you can get them to increase their offer to reduce the shortfall.
You cannot sue the driver for this. It's a risk you take when financing a car, and it's why GAP insurance exists.
The insurer hasn't even made an offer yet (see post #5.), so arguing is a bit premature!
The ombudsman's guidelines say the valuation should be based on the trade guides (Glass's etc.). They specifically warn against using adverts, since they show only asking prices.0 -
Perhaps.No. Thats the WBAC trade value, not the retail value of his car.
Indeed.They should / will pay out market value for the car - two different things.
But the principle remains.
And any difference between that and the finance settlement is still not the insurer's problem.His car is worth a lot more than £3.5K on the open market and the offer made by the insurance company should reflect that.0 -
The insurer hasn't even made an offer yet (see post #5.), so arguing is a bit premature!
The ombudsman's guidelines say the valuation should be based on the trade guides (Glass's etc.). They specifically warn against using adverts, since they show only asking prices.
They should be based on trade guides, but not on trade price, which would be the buying price, not the selling price.
Typically they should offer at least half way between the two.0 -
Perhaps.
Theres no "Perhaps" about it. Its a statement of fact - the price he quoted was the WBAC price. The insurer hasnt given a figure yet, but when they do, it wont be a trade price.But the principle remains.
And any difference between that and the finance settlement is still not the insurer's problem.
Agreed. And i never said otherwise. However it should be a much smaller amount than the £2000 the O/P is currently worrying about, and potentially could be zero or very close to it.0 -
The insurer hasn't even made an offer yet (see post #5.), so arguing is a bit premature!
The ombudsman's guidelines say the valuation should be based on the trade guides (Glass's etc.). They specifically warn against using adverts, since they show only asking prices.
Oh apologies I mis-read. I thought that what was offered, and the OP checked this against a WBAC valuation.
Yes very premature. Wait for the insurers offer and go from there!0 -
No, for two reasons.So is it possible to sue the driver for the money we are going to have to pay out now because of his fault?
First, as has already been mentioned, the driver is not liable for the outstanding finance - just for the damage that he's caused to your property. Before the accident you had a car that was worth (say) £3500 and a debt that needed paying off. If the insurer pays you £3500 then you have the value of your car, and a debt that still needs paying off - financially you're in the same position as you were. The driver's carelessness hasn't caused the debt, and if the terms of the finance agreement make paying it off early inconvenient then that's a shame - but too remote from the driver's actions to claim for. So if you think that you car is worth more than £3500 by all means argue that point - but the outstanding finance is a red herring.
Or put another way - if you damaged someone else's property you would expect to pay for it - that's right and proper. But would you expect to pay a different amount depending on whether he'd bought it with cash or with a credit card? And if he'd bought it with a credit card, would you offer him a different amount depending on whether he'd paid most of it off or only made the minimum payments?
The second reason is that the insurer is required to cover ALL the driver's liabilities. So if you could claim the outstanding finance, his insurer would be required to cover it, so if you tried to claim it from the driver you would just end up dealing with his insurer anyway. There are actually no circumstances in which you can claim money from the driver, but not from his insurer.0
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