Gap insurance confusion?
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moneysaver129
Posts: 67 Forumite
I have leased/hired a new car on a PCH agreement with a finance company for two years.
I have fully comprehensive car insurance with a mainstream UK insurer. Their policy says they replace a vehicle that is written off on a like for like basis.
I have also been told elsewhere -
'Many car insurers will replace a brand new car if it's written off in the first year. If your car has just rolled off the production line, check with your car insurer before you look for a Gap provider to see if you would be covered, at least for the first 12 months.
So is GAP insurance required? The finance company think it is. They say they may not be recompensed in cash. Only recieving another car from the main insurer?
It all seems very confusing for the customer.
I have fully comprehensive car insurance with a mainstream UK insurer. Their policy says they replace a vehicle that is written off on a like for like basis.
I have also been told elsewhere -
'Many car insurers will replace a brand new car if it's written off in the first year. If your car has just rolled off the production line, check with your car insurer before you look for a Gap provider to see if you would be covered, at least for the first 12 months.
So is GAP insurance required? The finance company think it is. They say they may not be recompensed in cash. Only recieving another car from the main insurer?
It all seems very confusing for the customer.
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Comments
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It depends how the finance company deal with a write off.
Some will roll the loan over to a replacement car. You need to call, ask the question and get confirmation in writing of how they deal with it.0 -
Check what your policy says. It usually has to be new and registered in your name. A PCH car may not be registered in your name therefore the new car benefit won't apply and GAP insurance could be useful to you.moneysaver129 wrote: »I have fully comprehensive car insurance with a mainstream UK insurer. Their policy says they replace a vehicle that is written off on a like for like basis.0 -
So the finance company say they will not roll over the finance to a 'new replacement car' which is what the major insurer are adamant that is all they offer in the first year. This presents two problems:
The finance company will not get their money.
GAP insurance would not fill the whole cost of the vehicle so it is useless here as its main aim is to fill a shortfall.
The main issue is to get a mainstream insurer that will pay settlement in the first year not a replacement car. Any recommendations?0 -
Thank you lostinheaven for your detailed advice.
The problem would seem to be the insurer will not talk to the finance company (at least in their advice to us). Of course I have no doubt they will negotiate with the finance house eventually. But they and the finance house both want it all ways. The FH want us to insure the vehicle on their behalf. They will not accept a vehicle (which is what the Insurers want). The insurers want to make us a settlement (eventaully) which we would pay the finance company (which they may reject). We would end up sitting in the middle for goodness knows how long with any amount as a shortfall. GAP may cover that - but who knows. What a muddle! It may be the best way forward to send this to a consumer TV /radio show and let them sort it out.0 -
moneysaver129 wrote: »Thank you lostinheaven for your detailed advice.
The problem would seem to be the insurer will not talk to the finance company (at least in their advice to us). Of course I have no doubt they will negotiate with the finance house eventually. But they and the finance house both want it all ways. The FH want us to insure the vehicle on their behalf. They will not accept a vehicle (which is what the Insurers want). The insurers want to make us a settlement (eventaully) which we would pay the finance company (which they may reject). We would end up sitting in the middle for goodness knows how long with any amount as a shortfall. GAP may cover that - but who knows. What a muddle! It may be the best way forward to send this to a consumer TV /radio show and let them sort it out.
If the car isn’t registered in your name, I think you can forget about the replacement car benefit.
If it is written off, your car insurer will pay market value.
You then need to see what your PCH agreement says about what you owe. You may well have a shortfall which is where gap insurance comes in.0 -
I bought gap insurance for PCH through ALA (theres a code in this website somewhere). It was about £100 compared to the £300 or so the lease company were happy to sell me it for ( same story with my last car and a main dealer)0
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