Query - Non fault accident, finance nightmare
Discussion
Hi, details are a bit 3rd hand but here goes...
A family member has had an accident on a road in and around Newcastle. The car is new to them and had it less than a month, it's a couple of years old and hasn't even made the first payment. This is due next week. According to the initial query with the finance company the payment of course will have to continue and depending on the engineers report, valuation etc. this could be refunded.
The other party has admitted liability so the claim has been closed on their side and marked as informational, a hire car has been provided and all claim actions are against the other party policy.
The total settlement figure of the car is around £20k, this takes into account a rebate that's applicable for early settlement and takes into account interest that wouldn't be accumulated over a 4 year PCP deal.
They are worried that the valuation is going to come back much less than this settlement figure and through no fault of their own will end up falling short on the value; which seems really wrong given they haven't even paid the first payment.
Of course the ideal situ is that they simply settle the finance from the other party and they get to start afresh. No GAP insurance present, they are checking if they have anything to cover any uninsured losses but aren't confident.
Just seems like a really rubbish situ for them that was of no foul of their own. Final engineer report is still to be sent but so far the parts and labour for the damaged body bits are in excess of £10k, with suspected damage to the radiators / intercoolers / engine / clutch as can't get it started or select any gears.
No injuries thankfully, low speed accident but guess all the bits that are designed to take the impact did exactly that.
Should they invoke legal representation?
A family member has had an accident on a road in and around Newcastle. The car is new to them and had it less than a month, it's a couple of years old and hasn't even made the first payment. This is due next week. According to the initial query with the finance company the payment of course will have to continue and depending on the engineers report, valuation etc. this could be refunded.
The other party has admitted liability so the claim has been closed on their side and marked as informational, a hire car has been provided and all claim actions are against the other party policy.
The total settlement figure of the car is around £20k, this takes into account a rebate that's applicable for early settlement and takes into account interest that wouldn't be accumulated over a 4 year PCP deal.
They are worried that the valuation is going to come back much less than this settlement figure and through no fault of their own will end up falling short on the value; which seems really wrong given they haven't even paid the first payment.
Of course the ideal situ is that they simply settle the finance from the other party and they get to start afresh. No GAP insurance present, they are checking if they have anything to cover any uninsured losses but aren't confident.
Just seems like a really rubbish situ for them that was of no foul of their own. Final engineer report is still to be sent but so far the parts and labour for the damaged body bits are in excess of £10k, with suspected damage to the radiators / intercoolers / engine / clutch as can't get it started or select any gears.
No injuries thankfully, low speed accident but guess all the bits that are designed to take the impact did exactly that.
Should they invoke legal representation?
Davie_GLA said:
Hi, details are a bit 3rd hand but here goes...
A family member has had an accident on a road in and around Newcastle. The car is new to them and had it less than a month, it's a couple of years old and hasn't even made the first payment. This is due next week. According to the initial query with the finance company the payment of course will have to continue and depending on the engineers report, valuation etc. this could be refunded.
The other party has admitted liability so the claim has been closed on their side and marked as informational, a hire car has been provided and all claim actions are against the other party policy.
The total settlement figure of the car is around £20k, this takes into account a rebate that's applicable for early settlement and takes into account interest that wouldn't be accumulated over a 4 year PCP deal.
They are worried that the valuation is going to come back much less than this settlement figure and through no fault of their own will end up falling short on the value; which seems really wrong given they haven't even paid the first payment.
Of course the ideal situ is that they simply settle the finance from the other party and they get to start afresh. No GAP insurance present, they are checking if they have anything to cover any uninsured losses but aren't confident.
Just seems like a really rubbish situ for them that was of no foul of their own. Final engineer report is still to be sent but so far the parts and labour for the damaged body bits are in excess of £10k, with suspected damage to the radiators / intercoolers / engine / clutch as can't get it started or select any gears.
No injuries thankfully, low speed accident but guess all the bits that are designed to take the impact did exactly that.
Should they invoke legal representation?
NO, not unless they want to throw even more money away.A family member has had an accident on a road in and around Newcastle. The car is new to them and had it less than a month, it's a couple of years old and hasn't even made the first payment. This is due next week. According to the initial query with the finance company the payment of course will have to continue and depending on the engineers report, valuation etc. this could be refunded.
The other party has admitted liability so the claim has been closed on their side and marked as informational, a hire car has been provided and all claim actions are against the other party policy.
The total settlement figure of the car is around £20k, this takes into account a rebate that's applicable for early settlement and takes into account interest that wouldn't be accumulated over a 4 year PCP deal.
They are worried that the valuation is going to come back much less than this settlement figure and through no fault of their own will end up falling short on the value; which seems really wrong given they haven't even paid the first payment.
Of course the ideal situ is that they simply settle the finance from the other party and they get to start afresh. No GAP insurance present, they are checking if they have anything to cover any uninsured losses but aren't confident.
Just seems like a really rubbish situ for them that was of no foul of their own. Final engineer report is still to be sent but so far the parts and labour for the damaged body bits are in excess of £10k, with suspected damage to the radiators / intercoolers / engine / clutch as can't get it started or select any gears.
No injuries thankfully, low speed accident but guess all the bits that are designed to take the impact did exactly that.
Should they invoke legal representation?
The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
Yellow Lizud said:
NO, not unless they want to throw even more money away.
The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
This is not correct. It's got nothing to do with what insurance the third party has in place. The third party was negligent and therefore is liable for the first party's direct costs.The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
However the third party's insurance will cover their losses. That's how 3rd party insurance works.
BertBert said:
Yellow Lizud said:
NO, not unless they want to throw even more money away.
The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
This is not correct. It's got nothing to do with what insurance the third party has in place. The third party was negligent and therefore is liable for the first party's direct costs.The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
However the third party's insurance will cover their losses. That's how 3rd party insurance works.
Edit: might it be possible for the first party to claim on their own insurance (assuming it's fully comp)? They might be less argumentative re invoice cost vs market value, and I have a vague recollection that some policies will pay full invoice cost if your car is written off in the first (say) 12 months...
Edited by Roger Irrelevant on Sunday 28th April 08:55
BertBert said:
This is not correct. It's got nothing to do with what insurance the third party has in place. The third party was negligent and therefore is liable for the first party's direct costs.
However the third party's insurance will cover their losses. That's how 3rd party insurance works.
I thought it didn't cover the difference between market value of the third party's vehicle and any finance settlement figure if the latter is higher. I thought that was what GAP insurance was for.However the third party's insurance will cover their losses. That's how 3rd party insurance works.
The loss is the loss as defined in tort law.
All the thoughts about market value are for your own/first party's insurance which is governed primarily by the contract between you and your insurance company.
The claim from a third party is governed by tort law and covers all loses where a third party has been negligent.
The subject of what direct losses the third party is obliged to pay has been discussed on here before. It's not an easy one to fathom. In this case I think it is straight forward.
All the thoughts about market value are for your own/first party's insurance which is governed primarily by the contract between you and your insurance company.
The claim from a third party is governed by tort law and covers all loses where a third party has been negligent.
The subject of what direct losses the third party is obliged to pay has been discussed on here before. It's not an easy one to fathom. In this case I think it is straight forward.
BertBert said:
The loss is the loss as defined in tort law.
All the thoughts about market value are for your own/first party's insurance which is governed primarily by the contract between you and your insurance company.
The claim from a third party is governed by tort law and covers all loses where a third party has been negligent.
The subject of what direct losses the third party is obliged to pay has been discussed on here before. It's not an easy one to fathom. In this case I think it is straight forward.
So straight forward you don't mention it.All the thoughts about market value are for your own/first party's insurance which is governed primarily by the contract between you and your insurance company.
The claim from a third party is governed by tort law and covers all loses where a third party has been negligent.
The subject of what direct losses the third party is obliged to pay has been discussed on here before. It's not an easy one to fathom. In this case I think it is straight forward.
BertBert said:
Yellow Lizud said:
NO, not unless they want to throw even more money away.
The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
This is not correct. It's got nothing to do with what insurance the third party has in place. The third party was negligent and therefore is liable for the first party's direct costs.The insurance company will almost definitely only payout the market value of the vehicle. They will not care about any PHP, finance deals, or interest rates.
That is exactly what GAP insurance is for.
You said it was a "a really rubbish situ for them that was of no foul of their own". Unfortunately it was a 'foul' (fault) of their own as they choose to save money by not having GAP insurance. You can't claim on insurance for something that isn't insured.
Personally I think anyone who has a new(ish) car which will depreciate rapidly or any form of finance deal would be mad to not have GAP insurance. I don't mean the expensive version the dealer tries to flog you, plenty of companies offering it much cheaper and worth every penny, even if only for piece of mind.
Thanks. Further detail from them is that no significant deposit was paid. They were vague but mentioned less than £500.
I’ll leave them to it now I think. They have it all in hand of the insurers and I guess the game begins.
Thanks for the input, I’ll update if anyone is interested and if I get any more detail.
I’ll leave them to it now I think. They have it all in hand of the insurers and I guess the game begins.
Thanks for the input, I’ll update if anyone is interested and if I get any more detail.
Definitely do. I just bought a car on a very attractive PCP but WBAC puts it at £24k and easily £27k outstanding in finance before early settlement fees etc
I went for GAP as it seemed a no brainer for £100 and having seen the discussion many times on here I’m still none the wiser on whether a write off would insurance would settle full PCP or not.. esp in year 2 on
I went for GAP as it seemed a no brainer for £100 and having seen the discussion many times on here I’m still none the wiser on whether a write off would insurance would settle full PCP or not.. esp in year 2 on
essayer said:
Definitely do. I just bought a car on a very attractive PCP but WBAC puts it at £24k and easily £27k outstanding in finance before early settlement fees etc
I went for GAP as it seemed a no brainer for £100 and having seen the discussion many times on here I’m still none the wiser on whether a write off would insurance would settle full PCP or not.. esp in year 2 on
I did the same last year after paying top money for a nearly new car. Its WBAC valuation now is horrendous. I went for GAP as it seemed a no brainer for £100 and having seen the discussion many times on here I’m still none the wiser on whether a write off would insurance would settle full PCP or not.. esp in year 2 on
Never bought GAP before - it's long been regarded as a bit of a scam as its payout ratio is so low (the FCA have clamped down on its sale for the same reason) but looking at a potential £10K+ loss I felt it was worth it this time. Bought from ALA, PH sponsor.
GAP insurance varies in type and cost I have return to invoice GAP on my M4 because I bought it through a combination of PX and Cash if it is written off they will pay me out to the invoice value minus the payout from my regular insurance company.
Other GAP policies are available for those that choose the PCP method and I assume PCH too, none of this assists the OP though
Other GAP policies are available for those that choose the PCP method and I assume PCH too, none of this assists the OP though
mcflurry said:
liner33 said:
If the car has been owned for less than a month the 3rd party should cover the invoice total
Agreed - the invoice is a fair value of the car.The settlement figure for a month's interest on the loan shouldn't be too high - maybe 2 months of interest?
Sheepshanks said:
I did the same last year after paying top money for a nearly new car. Its WBAC valuation now is horrendous.
Never bought GAP before - it's long been regarded as a bit of a scam as its payout ratio is so low (the FCA have clamped down on its sale for the same reason) but looking at a potential £10K+ loss I felt it was worth it this time. Bought from ALA, PH sponsor.
The payout ratio is low as not that many people write their cars off, so not many claim. For the cost its insane to not have it. Never bought GAP before - it's long been regarded as a bit of a scam as its payout ratio is so low (the FCA have clamped down on its sale for the same reason) but looking at a potential £10K+ loss I felt it was worth it this time. Bought from ALA, PH sponsor.
A really good mate wrote of his Maserati Ghilibi when it was 2.5 years old, it was worth about 50% of what he paid for it, his GAP paid out something mad like £39K, the difference between invoice and insurance settlement.
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