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  • FIRST POST
    • legionare64
    • By legionare64 15th Apr 19, 11:31 AM
    • 35Posts
    • 14Thanks
    legionare64
    PCP and car write off
    • #1
    • 15th Apr 19, 11:31 AM
    PCP and car write off 15th Apr 19 at 11:31 AM
    This doesn't effect me but asking question out of curiosity . When I bought new car I checked with my insurance company if it was old for new in first year. They confirmed that if repairs cost more than 60% of value and car was still current model within first year it would be replaced with a new one. They stipulate this only applies if I am first owner so no Demonstrator or pre reg car would count. How would this work with PCP as the car would be owned by finance company and not the insured.
Page 1
    • wgl2014
    • By wgl2014 15th Apr 19, 11:37 AM
    • 1,027 Posts
    • 656 Thanks
    wgl2014
    • #2
    • 15th Apr 19, 11:37 AM
    • #2
    • 15th Apr 19, 11:37 AM
    Ask your insurance as it is their opinion that would ultimately matter!

    (If you don't already have it then do some research on GAP insurance)
    • foxy-stoat
    • By foxy-stoat 15th Apr 19, 11:38 AM
    • 4,002 Posts
    • 2,323 Thanks
    foxy-stoat
    • #3
    • 15th Apr 19, 11:38 AM
    • #3
    • 15th Apr 19, 11:38 AM
    Best ask your insurers - they will all have different wording and interpretations/ways to avoid paying out.
    • neilmcl
    • By neilmcl 15th Apr 19, 11:39 AM
    • 12,841 Posts
    • 9,621 Thanks
    neilmcl
    • #4
    • 15th Apr 19, 11:39 AM
    • #4
    • 15th Apr 19, 11:39 AM
    No different, the insurance will pay for the replacement of a new vehicle.
    • legionare64
    • By legionare64 15th Apr 19, 11:42 AM
    • 35 Posts
    • 14 Thanks
    legionare64
    • #5
    • 15th Apr 19, 11:42 AM
    • #5
    • 15th Apr 19, 11:42 AM
    Ask your insurance as it is their opinion that would ultimately matter!

    (If you don't already have it then do some research on GAP insurance)
    Originally posted by wgl2014
    please read my post again. I said this doesn't effect me and I am curious about how it works. I know that my insurance will replace my car as it is paid for and not on PCP, but they had stipulations about car ownership. I asked for opinions on what people thought .. to generate conversation .
    Call your insurance company was not helpful in this process.
    • DrEskimo
    • By DrEskimo 15th Apr 19, 12:01 PM
    • 470 Posts
    • 349 Thanks
    DrEskimo
    • #6
    • 15th Apr 19, 12:01 PM
    • #6
    • 15th Apr 19, 12:01 PM
    I was under the impression you had to be the first registered keeper, rather than owner.

    I.e. the V5 has to be registered to you first. Pre-Reg or lease cars have the V5 registered to the company. A new PCP wouldn't.
    • legionare64
    • By legionare64 15th Apr 19, 12:05 PM
    • 35 Posts
    • 14 Thanks
    legionare64
    • #7
    • 15th Apr 19, 12:05 PM
    • #7
    • 15th Apr 19, 12:05 PM
    I was under the impression you had to be the first registered keeper, rather than owner.

    I.e. the V5 has to be registered to you first. Pre-Reg or lease cars have the V5 registered to the company. A new PCP wouldn't.
    Originally posted by DrEskimo
    Thanks, that was the bit I was curious about on PCP cars.
    • wgl2014
    • By wgl2014 15th Apr 19, 2:14 PM
    • 1,027 Posts
    • 656 Thanks
    wgl2014
    • #8
    • 15th Apr 19, 2:14 PM
    • #8
    • 15th Apr 19, 2:14 PM
    please read my post again. I said this doesn't effect me and I am curious about how it works. I know that my insurance will replace my car as it is paid for and not on PCP, but they had stipulations about car ownership. I asked for opinions on what people thought .. to generate conversation .
    Call your insurance company was not helpful in this process.
    Originally posted by legionare64
    Having a conversation on the issue or gathering opinions is not going to be of any (hypothetical) assistance if the insurers disagree and refuse to pay out. Insurance policies are not identical in wording and exclusions despite seemingly including similar cover overall.

    Bottom line is it depends......
    • lostinheaven
    • By lostinheaven 16th Apr 19, 10:41 AM
    • 223 Posts
    • 117 Thanks
    lostinheaven
    • #9
    • 16th Apr 19, 10:41 AM
    • #9
    • 16th Apr 19, 10:41 AM
    This doesn't effect me but asking question out of curiosity . When I bought new car I checked with my insurance company if it was old for new in first year. They confirmed that if repairs cost more than 60% of value and car was still current model within first year it would be replaced with a new one. They stipulate this only applies if I am first owner so no Demonstrator or pre reg car would count. How would this work with PCP as the car would be owned by finance company and not the insured.
    Originally posted by legionare64

    So long as you were/are the first and only registered keeper of the vehicle you shouldn't have any issues with the motor insurer on that front although, getting them to offer a new-for-old replacement even if you did qualify is another matter as there are a number of ways they can avoid it... is there an (as they would see it) equivalent vehicle available at the time of claim? Can they get it within their required timescale? Have you breached a specified mileage limit beyond which the new-for-old cover is void? To name but a few.


    A bigger concern though is.... the finance company.


    Consider, if you qualify for and receive a new-for-old replacement vehicle from your motor insurer within the first year (with some insurers it can be up to 2-years) and the original vehicle was the subject of a PCP agreement... when you get to the end of the original PCP term it's likely you'll then be in possession of a newer (read "more valuable") vehicle than you would have had if it had NOT been written off.


    Consequently, the likelihood of you having (increased) equity in the finance agreement is higher or, in other words, you'd arguably be able to "profit" from the original vehicle having been written off.


    As a result of this, a growing number of finance companies will reject the offer of a New-For-Old replacement vehicle from a motor insurer, preferring instead for the original finance agreement to be settled. In return, the motor insurer will often treat this rejection as being the equivalent of there not being a replacement vehicle available at the time of claim and most (not all) will revert to a market value payout in such cases.


    General rule is... unless you're willing to interrogate your motor insurer and finance company in advance and acquire written positive responses confirming to your favour how they would handle the vehicle being written off in the first year (or two - subject to the insurer)... do not rely on new-for-old cover from your motor insurer. Buy GAP insurance instead.
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