Lease car written off

[carzzz]

Hi, basically I was in a non fault accident and had my lease car wrote off with 12 months remaining on it. After speaking to vwfs they have informed me they'll deal directly with my insurance the not so lovely lady at vwfs told me I would be liable for any shortfall which worries me because I get the impression they'll just accept any offer from the insurance and chase me for the rest instead of negotiating a fair price.

What price will vwfs use? The price of the car when it was leased or todays market value?

[x5tuu]

It’s not in your interest for the insurer to work directly with VWFS

Have provided authority for them to do such?

What if the insurer want to pay £20k for argument sake and VWFS only need £18k would they £2k then disappear into the ether?!

I wouldn’t be happy with this arrangement at all.

[Canon_Fodder]

Previous threads and discussions seem to to suggest that the lease co and the insurer settle on a mutually agreeable figure and the punter is never/rarely liable.

[saaby93]

Canon_Fodder said:

Previous threads and discussions seem to to suggest that the lease co and the insurer settle on a mutually agreeable figure and the punter is never/rarely liable.

linky?

[carzzz]

x5tuu said:

It’s not in your interest for the insurer to work directly with VWFS

Have provided authority for them to do such?

What if the insurer want to pay £20k for argument sake and VWFS only need £18k would they £2k then disappear into the ether?!

I wouldn’t be happy with this arrangement at all.

Its in the t&cs of the lease, basically you agree to them acting as your agent for negotiating and collection of monies owed. I'm more concerned about vwfs accepting a low ball offer then chasing me for a shortfall.

[Auto810graphy]

Canon_Fodder said:

Previous threads and discussions seem to to suggest that the lease co and the insurer settle on a mutually agreeable figure and the punter is never/rarely liable.

This has always been our experience and it is not that uncommon. To date I am only aware of one incident where the insurer did not pay the full settlement but the car was way over mileage so I understood the lease companies decision as the customer would of had to have paid excess mileage anyway.

[Driver101]

If you've had the car for a couple of years the increase in market value will be on your side.

[saaby93]

carzzz said:

x5tuu said:

It’s not in your interest for the insurer to work directly with VWFS

Have provided authority for them to do such?

What if the insurer want to pay £20k for argument sake and VWFS only need £18k would they £2k then disappear into the ether?!

I wouldn’t be happy with this arrangement at all.

Its in the t&cs of the lease, basically you agree to them acting as your agent for negotiating and collection of monies owed. I'm more concerned about vwfs accepting a low ball offer then chasing me for a shortfall.

It's unlikely they'll do that but you'll lose your up front payment if you were on other than a 1+ deal - hence why 1+ 23 or 1+35 keep losses to a minimum

[Sheepshanks]

x5tuu said:

What if the insurer want to pay £20k for argument sake and VWFS only need £18k would they £2k then disappear into the ether?!

Understand what you're saying but this is a lease car - VWFS own it and the user isn't going to profit from whether it be now, or at the end of the lease.

[soxboy]

We had a lease car written off 2 years into a 3 year lease. Insurers sorted it directly with lease company.

We were advised that we could potentially be liable for any shortfall but it didn’t happen. I believe this may be more of a risk in previous years where the depreciation curve was steeper when a car was nearly new.

[carzzz]

Update- my insurance have offered a sum that covers the finance and my excess but nothing else. This sum is way below market value by many thousands citing vwfs can't charge vat on the car that's why the offers so low.
Shouldn't they just pay market value? Any input would be greatly appreciated.

[saaby93]

carzzz said:

Update- my insurance have offered a sum that covers the finance and my excess but nothing else. This sum is way below market value by many thousands citing vwfs can't charge vat on the car that's why the offers so low.
Shouldn't they just pay market value? Any input would be greatly appreciated.

Isnt that enough?
What doesnt it cover that youre worried about?

[PistonBroker]

VWFS are presumably VAT-registered, so any settlement would be ex. VAT.

As saaby93 says, if you're not out of pocket at the end of it, what's the problem?

[Durzel]

carzzz said:

Update- my insurance have offered a sum that covers the finance and my excess but nothing else. This sum is way below market value by many thousands citing vwfs can't charge vat on the car that's why the offers so low.
Shouldn't they just pay market value? Any input would be greatly appreciated.

What difference does it make? It's a lease car, so its not yours to make decisions about.

[Camelot1971]

carzzz said:

Update- my insurance have offered a sum that covers the finance and my excess but nothing else. This sum is way below market value by many thousands citing vwfs can't charge vat on the car that's why the offers so low.
Shouldn't they just pay market value? Any input would be greatly appreciated.

It's not your car so any money between VWFS and the insurer is nothing to do with you. The best you can hope for is nothing further to pay and you'll need to sign a new lease.

[randlemarcus]

Does the "not charging VAT" bit add up, i.e. the offer is approx 20% below the value of the car, were it not a lease? If Yes, shrug and move on. If No, maybe you need to look further into being in the same position as you were before the crash, i.e. ideally with some equity that you could roll into the next lease.

[Truckosaurus]

Yep. Best Case Scenario with a lease car insurance is that the insurance leaves you with nothing to pay and the lease deal terminated.

There are Gap Insurance policies available that would additionally pay out enough for another initial payment.

[Gad-Westy]

randlemarcus said:

Does the "not charging VAT" bit add up, i.e. the offer is approx 20% below the value of the car, were it not a lease? If Yes, shrug and move on. If No, maybe you need to look further into being in the same position as you were before the crash, i.e. ideally with some equity that you could roll into the next lease.

You never have equity in a lease car. You are not the car's owner.

[randlemarcus]

Gad-Westy said:

You never have equity in a lease car. You are not the car's owner.

Correct, but I had thought the current silliness was littered with GFV < Value situations, or is that only for PCP deals?

[Gad-Westy]

randlemarcus said:

Gad-Westy said:

You never have equity in a lease car. You are not the car's owner.

Correct, but I had thought the current silliness was littered with GFV < Value situations, or is that only for PCP deals?

Yeah, PCP, you take ownership of the car via a loan, part of which is deferred. And have the option of returning the car or paying the deferred amount. Leasing is closer to a long term hire except you pay for the insurance and maintenance.