Anyone suffered a loss on a contract hire vehicle?

[Gio G]

Posted elsewhere on the forums of having my car stolen last week.

Insurance is willing to settle directly with the leasing company, which is good and agree with their figure. Do I just wave goodbye to those initial rental payments I made 7 months ago? 6 months in advance. Do I just put it down to experience and move on?

The positive is that I owe nothing to anyone, the downside is that I will have to put another deposit down for my next car. Just feels a little difficult for me to accept, as if I purchased the car outright or on PCP with GAP, I am pretty sure I would not be out of pocket..

I suspect that is the risk you take making bigger upfront payments on lease.. Anyone have any experience of this with any insurers?

Thanks G

[Dempsey1971]

I would ask the insurance company to settle to you.

The payout should be worth more than you owe the lease company for the car. Settle the outstanding with said lease company and keep the difference as a deposit on the next lease.

You may notice a slight difference in waht you get due to excesses etc in the insurance policy and have to put a bit towards the next upfront payment

[rfoster]

Insurance company will settle directly with the owner of the car, not the lessee. Speak with the leasing company about the initial rental - it's quite possible that you'll get some of your initial rental back on a pro-rata basis (dependant on how much the insurance company are paying out.)

[Gio G]

Dempsey1971 said:

I would ask the insurance company to settle to you.

The payout should be worth more than you owe the lease company for the car. Settle the outstanding with said lease company and keep the difference as a deposit on the next lease.

You may notice a slight difference in waht you get due to excesses etc in the insurance policy and have to put a bit towards the next upfront payment

That is the point. Insurance just wants to settle the figure with the leasing company and not me, as they own the car. The settlement figure is some £4k lower than the market value (Glass Guide). The insurance response to me was, I do not own the vehicle, it is a rental, therefore will settle the smaller amount with the leasing company. They suggested I cannot "profit from an insurance claim". Not sure what else to do but put a complaint in. Hence why the question around do I just put it down to experience..

G

[thelawnet]

You need to get your contract hire documents, and your insurance policy, and read them fking carefully.

The insurers may be ripping you off.

Beware!

"If we know you are paying for your car by hire purchase or under a leasing agreement then we will pay the proceeds of the claim to the company to which you are liable under the hire purchase agreement or from which you are leasing your car. If you owe less than the proceeds of your claim, we will pay you the difference;"

Edited by thelawnet on Thursday 30th April 16:36

[xRIEx]

Gio G said:

those initial rental payments I made 7 months ago? 6 months in advance.


the downside is that I will have to put another deposit down for my next car.

I think you may be confusing the terminology - that initial lump payment was not a deposit on the lease, it was the first monthly lease payment. It was not 6 months' worth of payments, it was one month's payment, just a heavily-weighted one.

I don't know if you would be due any of it back (for the reasons above) but the pessimist in me highly doubts it.

[Emeye]

Is this not why having GAP insurance on a lease is highly recommended?

[Gio G]

xRIEx said:

I think you may be confusing the terminology - that initial lump payment was not a deposit on the lease, it was the first monthly lease payment. It was not 6 months' worth of payments, it was one month's payment, just a heavily-weighted one.

I don't know if you would be due any of it back (for the reasons above) but the pessimist in me highly doubts it.

I would agree with what you said, they refer to it as 6+23, meaning 6 initial rental payments upfront and then followed 23 payments. Spoke to the leasing company, they are washing their hands with it, saying you need to convince the insurance company to make you good. Really can't see how they care..

G

[ILoveMondeo]

Are you sure you dont have GAP insurance?

It's normally pushed pretty hard when signing up for a lease/pcp deal.

ETA having said that, only Return to Invoice GAP would help you here... it's just to cover off any gap between value of car/insurance payout and what is owed to the insurance company. Not to compensate you for any payments you may have made.

As has been said that 6 monthly payments isnt' really 6 monthly payments, it' a "driving off the forecourt in a new car tax"... there to keep the payments down on a monthly basis and more affordable (and more likely to get credit approved, lower risk with a "deposit")...

Edited by ILoveMondeo on Thursday 30th April 17:09

[thelawnet]

Emeye said:

Is this not why having GAP insurance on a lease is highly recommended?

No, the reason GAP insurance is highly recommended is because it makes dealers lots of profit.

And the purpose of GAP insurance is usually the opposite scenario - you owe the finance company £15k, but the car was only worth £12k, so the GAP insurance covers the £3k that you would otherwise have to pay.

Still basically the modern equivalent of PPI of course.

[thelawnet]

ILoveMondeo said:

As has been said that 6 monthly payments isnt' really 6 monthly payments, it' a "driving off the forecourt in a new car tax"... there to keep the payments down on a monthly basis and more affordable (and more likely to get credit approved, lower risk with a "deposit")...

Actually it's kind of the opposite of a tax, in that six months deposit will work out cheaper than 3 months, and 9 months will be cheaper still.

[Sheepshanks]

thelawnet said:

"... If you owe less than the proceeds of your claim, we will pay you the difference;"

What are "proceeds of your claim"?

I'd take that to mean money coming from a 3rd party.

[Sheepshanks]

ILoveMondeo said:

Are you sure you dont have GAP insurance?

There isn't any gap - in fact there should be a surplus, which the OP would like to get his hands on.

ILoveMondeo said:

ETA having said that, only Return to Invoice GAP would help you here... it's just to cover off any gap between value of car/insurance payout and what is owed to the insurance company. Not to compensate you for any payments you may have made.

No it wouldn't. He doesn't have an invoice - he didn't own the car.

[Sheepshanks]

Gio G said:

That is the point. Insurance just wants to settle the figure with the leasing company and not me, as they own the car. The settlement figure is some £4k lower than the market value (Glass Guide). The insurance response to me was, I do not own the vehicle, it is a rental, therefore will settle the smaller amount with the leasing company. They suggested I cannot "profit from an insurance claim". Not sure what else to do but put a complaint in. Hence why the question around do I just put it down to experience..

In some ways I'm thinking this might be just tough st, as you can't compare the car's current market value with the settlement figure, but on the other hand if there had been a shortage then you'd have been expected to make it up (that where GAP would have stepped in).

Do you know what the basis of the settlement figure is? Is it the projected end of lease value together with the lost lease payments?

[Gio G]

thelawnet said:

No, the reason GAP insurance is highly recommended is because it makes dealers lots of profit.

And the purpose of GAP insurance is usually the opposite scenario - you owe the finance company £15k, but the car was only worth £12k, so the GAP insurance covers the £3k that you would otherwise have to pay.

Still basically the modern equivalent of PPI of course.

Agree - I have GAP, but it was not needed, as the value from the leasing company to settle was acceptable to the insurance company and there was no GAP to cover. GAP insurance will however cover my excess. The moral to this story is if your car gets stolen early in your contract hire and you have made some large payments upfront, you are screwed, you are not covered!! Unless anyone can tell me different? If I had gone for a PCP, GAP would have returned it to the invoice value and any deposit I paid, would not be lost.


G

[Gio G]

Sheepshanks said:

In some ways I'm thinking this might be just tough st, as you can't compare the car's current market value with the settlement figure, but on the other hand if there had been a shortage then you'd have been expected to make it up (that where GAP would have stepped in).

Do you know what the basis of the settlement figure is? Is it the projected end of lease value together with the lost lease payments?

Calculated as:

The months of the vehicle contract that have expired
The current market value of the vehicle
The actual mileage figure you have supplied as a date of write off

G

[a7x88]

Surely GAP is irrelevant as the insures have settled with the lease co for what the car is worth.
From my understanding the OP is annoyed as he put 6 months rental payment down in order to have use of a car for 24 months.

In reality he has had just 7 months use for his initial deposit? Should the lease co not supply you with another vehicle of similar spec? or pro rata your initial payment?

Seems pretty unfair to me unless i'm missing the obvious?

[Sheepshanks]

Gio G said:

Calculated as:

The months of the vehicle contract that have expired
The current market value of the vehicle
The actual mileage figure you have supplied as a date of write off

G

OK, what's do the lease company claim? They must want compensating for the loss of future lease payments.

Edited by Sheepshanks on Thursday 30th April 17:46

[Gio G]

a7x88 said:

Surely GAP is irrelevant as the insures have settled with the lease co for what the car is worth.
From my understanding the OP is annoyed as he put 6 months rental payment down in order to have use of a car for 24 months.

In reality he has had just 7 months use for his initial deposit? Should the lease co not supply you with another vehicle of similar spec? or pro rata your initial payment?

Seems pretty unfair to me unless i'm missing the obvious?

No, they just close the contract down and ask for the write of settlement to be paid.

[a7x88]

wow - so its tough st on the original payment