Lease car written off
Discussion
Looking for some advice or thoughts on our scenario..
We had a VW Polo on a 4 year lease from Dec 21.
In late April 24 we were involved in a crash where another drivers tyre burst and swerved from lane 1 into lane 3 taking our car out and duly writing it off!
We had the usual to sorry out and managed to get a new motor.
VW were terrible at getting the settlement figure out to insurance but finally did and our insurance have settled.
As far as we were concerned this would be the end of the matter.
We have now had a letter some weeks later from VW saying we owe further money calculated with *any rebates* minus *outstanding payments* coming to a final termination fee.
The final termination fee is only a couple of Ks short of what the settlement figure was which seems completely over the top if you also include we have paid 16 months plus a deposit (plus 2 further payments they have taken!)
Surely VW would provide a settlement fee that is all inclusive of any costs owed to them and there should be no additional figure they can try to claim from us?
Left us somewhat stressed given the fact we have had to take out a brand new car finance deal etc and all due to something completely outside of our control!
We had a VW Polo on a 4 year lease from Dec 21.
In late April 24 we were involved in a crash where another drivers tyre burst and swerved from lane 1 into lane 3 taking our car out and duly writing it off!
We had the usual to sorry out and managed to get a new motor.
VW were terrible at getting the settlement figure out to insurance but finally did and our insurance have settled.
As far as we were concerned this would be the end of the matter.
We have now had a letter some weeks later from VW saying we owe further money calculated with *any rebates* minus *outstanding payments* coming to a final termination fee.
The final termination fee is only a couple of Ks short of what the settlement figure was which seems completely over the top if you also include we have paid 16 months plus a deposit (plus 2 further payments they have taken!)
Surely VW would provide a settlement fee that is all inclusive of any costs owed to them and there should be no additional figure they can try to claim from us?
Left us somewhat stressed given the fact we have had to take out a brand new car finance deal etc and all due to something completely outside of our control!
What is a settlement fee? Is it he value that VW suggested it should be worth? I’m no expert but it may be that the value of the car, ie what was paid out by the insurer, may not necessarily have any relationship to what you are contractually obliged to pay when you exit the lease at any given point. Without meaning to sound like a dick, what does your lease contract say on this?
JonnyVW24 said:
Looking for some advice or thoughts on our scenario..
We had a VW Polo on a 4 year lease from Dec 21.
In late April 24 we were involved in a crash where another drivers tyre burst and swerved from lane 1 into lane 3 taking our car out and duly writing it off!
We had the usual to sorry out and managed to get a new motor.
VW were terrible at getting the settlement figure out to insurance but finally did and our insurance have settled.
As far as we were concerned this would be the end of the matter.
We have now had a letter some weeks later from VW saying we owe further money calculated with *any rebates* minus *outstanding payments* coming to a final termination fee.
The final termination fee is only a couple of Ks short of what the settlement figure was which seems completely over the top if you also include we have paid 16 months plus a deposit (plus 2 further payments they have taken!)
Surely VW would provide a settlement fee that is all inclusive of any costs owed to them and there should be no additional figure they can try to claim from us?
Left us somewhat stressed given the fact we have had to take out a brand new car finance deal etc and all due to something completely outside of our control!
What does your insurer say?We had a VW Polo on a 4 year lease from Dec 21.
In late April 24 we were involved in a crash where another drivers tyre burst and swerved from lane 1 into lane 3 taking our car out and duly writing it off!
We had the usual to sorry out and managed to get a new motor.
VW were terrible at getting the settlement figure out to insurance but finally did and our insurance have settled.
As far as we were concerned this would be the end of the matter.
We have now had a letter some weeks later from VW saying we owe further money calculated with *any rebates* minus *outstanding payments* coming to a final termination fee.
The final termination fee is only a couple of Ks short of what the settlement figure was which seems completely over the top if you also include we have paid 16 months plus a deposit (plus 2 further payments they have taken!)
Surely VW would provide a settlement fee that is all inclusive of any costs owed to them and there should be no additional figure they can try to claim from us?
Left us somewhat stressed given the fact we have had to take out a brand new car finance deal etc and all due to something completely outside of our control!
What the insurer pays out bears no relationship to any amount outstanding on the lease.
Insurance only pay out the market value which is more often than not less than the amount owed on any finance agreement.
That's why it's essential to take out insurance to cover any shortfall on an HP....PCP.....Lease etc.
Insurance only pay out the market value which is more often than not less than the amount owed on any finance agreement.
That's why it's essential to take out insurance to cover any shortfall on an HP....PCP.....Lease etc.
OP describes it as a non fault accident. The third parties insurance should have made good OPs costs in full.
GAP insurance is for when you write your car off yourself and YOUR insurer doesn't cover all costs.
Seems the issue is that VW gave a valuation which was settled by third party insurers, and have now asked for more money.
I'd be complaining to VW and disputing it if they are now giving you a figure different to a previously given settlement figure, and also go back to the third party insurer to invite them to cover the additional costs if VW won't budge.
So long as these additional costs were as a result of the third party then it should be covered by their insurer.
GAP insurance is for when you write your car off yourself and YOUR insurer doesn't cover all costs.
Seems the issue is that VW gave a valuation which was settled by third party insurers, and have now asked for more money.
I'd be complaining to VW and disputing it if they are now giving you a figure different to a previously given settlement figure, and also go back to the third party insurer to invite them to cover the additional costs if VW won't budge.
So long as these additional costs were as a result of the third party then it should be covered by their insurer.
essayer said:
This is the early termination fee, which triggers if you hand the car back early or it gets written off
Presumably you can claim it back from the third party?
Why? It's not clear from the OP's description that the tp was negligent and even if he was, he or his insurers are only liable for the value of the car they write off, not additional agreements that the OP may have entered into. Presumably you can claim it back from the third party?
Surely any insurers liability is limited to the value of the asset written off or stolen (ignoring for a moment things like PI and car hire).
Let’s say someone got a poor deal in buying a car, taking out finance with a low deposit and a high rate of interest (often leaving the settlement figure higher than the true value of the asset) why should any insurer pay for those decisions? Isn’t this what GAP is for?
Let’s say someone got a poor deal in buying a car, taking out finance with a low deposit and a high rate of interest (often leaving the settlement figure higher than the true value of the asset) why should any insurer pay for those decisions? Isn’t this what GAP is for?
Volvo1956 said:
What the insurer pays out bears no relationship to any amount outstanding on the lease.
Insurance only pay out the market value which is more often than not less than the amount owed on any finance agreement.
That's why it's essential to take out insurance to cover any shortfall on an HP....PCP.....Lease etc.
The difficulty with a lease is you can’t replace the car if it’s written off. The leasing company isn’t any worse off - arguably they’re better off as they get the value of the car back earlier than they expected - so it doesn’t seem reasonable for them to expect to receive the lost lease payments.Insurance only pay out the market value which is more often than not less than the amount owed on any finance agreement.
That's why it's essential to take out insurance to cover any shortfall on an HP....PCP.....Lease etc.
I suppose the problem is that lease is kind of a business product - with a PCP the early termination costs are minimal and limited by law.
spookly said:
OP describes it as a non fault accident. The third parties insurance should have made good OPs costs in full.
GAP insurance is for when you write your car off yourself and YOUR insurer doesn't cover all costs.
Seems the issue is that VW gave a valuation which was settled by third party insurers, and have now asked for more money.
I'd be complaining to VW and disputing it if they are now giving you a figure different to a previously given settlement figure, and also go back to the third party insurer to invite them to cover the additional costs if VW won't budge.
So long as these additional costs were as a result of the third party then it should be covered by their insurer.
You are kind of correct.GAP insurance is for when you write your car off yourself and YOUR insurer doesn't cover all costs.
Seems the issue is that VW gave a valuation which was settled by third party insurers, and have now asked for more money.
I'd be complaining to VW and disputing it if they are now giving you a figure different to a previously given settlement figure, and also go back to the third party insurer to invite them to cover the additional costs if VW won't budge.
So long as these additional costs were as a result of the third party then it should be covered by their insurer.
The 3rd party insurance will put the OP back into the position they were in at the point of the accident. They will give them the market value of the car at that point. It will not cover other liabilities.
If your car has a market value of £4k when it’s written off, that’s what the insurance will pay, they won’t pay £6k if that is what you owe VWFS.
I would guess this is what has happened here, the insurance payout falls short of the settlement figure, so the OP still owes the lease company for the difference.
nikaiyo2 said:
You are kind of correct.
The 3rd party insurance will put the OP back into the position they were in at the point of the accident. They will give them the market value of the car at that point. It will not cover other liabilities.
If your car has a market value of £4k when it’s written off, that’s what the insurance will pay, they won’t pay £6k if that is what you owe VWFS.
I would guess this is what has happened here, the insurance payout falls short of the settlement figure, so the OP still owes the lease company for the difference.
IIRC correctly the issue with Golf R write off I mentioned up-thread was the finance company’s settlement is based on value at end of lease plus outstanding payments. That figure was lower than the car was worth at the time, hence the PHer being miffed not to be given the difference. The 3rd party insurance will put the OP back into the position they were in at the point of the accident. They will give them the market value of the car at that point. It will not cover other liabilities.
If your car has a market value of £4k when it’s written off, that’s what the insurance will pay, they won’t pay £6k if that is what you owe VWFS.
I would guess this is what has happened here, the insurance payout falls short of the settlement figure, so the OP still owes the lease company for the difference.
For some extra context...
I am still trying to find our initial contract etc with VWFS and they have removed our agreement from our online account.
We also have dashcam footage from a lorry that shows they are 100% at fault and the TP has accepted full liability.
VWFS have been terrible and even sent a text to say we owe £1,400,000! Obviously a typo and they then sent a follow up email several days later to apologise...
We received a settlement figure from VWFS to our insurance of 14k after much chasing.
We know the market value is probably higher than this (16.5-17.5k) but due to it being lease insurance informed us they pay market value or lease settlement figure, whichever is lower.
Now from my understanding a settlement figure is what you pay to settle an arrangement and should be inclusive of all costs.
Insurance would then pay what is agreed as a fair market value and we owe anything above this.
At no point have insurance or VWFS intimated that there would be any additional costs on top the settlement.
The figures also don't seem to make sense...
We paid a 1800 deposit
180 a month for 16 month - 2900
Insurance have paid to settle - 14000
VWFS have issued a letter with the figures
Any rebates- 15500
MINUS
Outstanding lease - 5500
Which comes to them seeking a payment of 10k.
Surely it would be the we would owe the outstanding lease rather than the rebate figure (which is suspiciously close to the settlement figure plus the deposit we paid added together)
If it is the case then they are set to gain 29k for a 1.0 Polo that's list value was below 20k...
Also more frustratingly we have taken out a new PCP deal with them to avoid a lease again(which I'm sure they are making substantial profit on)
Going through a compensation claim with OIC in the first instance for the injuries sustained too.
I think it would have been more straightforward if we have been at fault!
I am still trying to find our initial contract etc with VWFS and they have removed our agreement from our online account.
We also have dashcam footage from a lorry that shows they are 100% at fault and the TP has accepted full liability.
VWFS have been terrible and even sent a text to say we owe £1,400,000! Obviously a typo and they then sent a follow up email several days later to apologise...
We received a settlement figure from VWFS to our insurance of 14k after much chasing.
We know the market value is probably higher than this (16.5-17.5k) but due to it being lease insurance informed us they pay market value or lease settlement figure, whichever is lower.
Now from my understanding a settlement figure is what you pay to settle an arrangement and should be inclusive of all costs.
Insurance would then pay what is agreed as a fair market value and we owe anything above this.
At no point have insurance or VWFS intimated that there would be any additional costs on top the settlement.
The figures also don't seem to make sense...
We paid a 1800 deposit
180 a month for 16 month - 2900
Insurance have paid to settle - 14000
VWFS have issued a letter with the figures
Any rebates- 15500
MINUS
Outstanding lease - 5500
Which comes to them seeking a payment of 10k.
Surely it would be the we would owe the outstanding lease rather than the rebate figure (which is suspiciously close to the settlement figure plus the deposit we paid added together)
If it is the case then they are set to gain 29k for a 1.0 Polo that's list value was below 20k...
Also more frustratingly we have taken out a new PCP deal with them to avoid a lease again(which I'm sure they are making substantial profit on)
Going through a compensation claim with OIC in the first instance for the injuries sustained too.
I think it would have been more straightforward if we have been at fault!
This is from our old VW lease agreement if it helps
VWFS said:
5.3 If the Vehicle is lost, damaged or destroyed so as to become an actual , arranged or constructive total loss you must pay us, when we ask, such sum as will equal the amount calculated in accordance with Term 8.2.
8.2 If we terminate the hiring, or accept your repudiation of this Agreement, you must pay us: … as compensation or agreed damages on our acceptance of your repudiation, or as a debt on our termination, the total amount of rentals payable during the Hiring Period (excluding VAT) less the amount of rentals paid or which have become due (excluding VAT) less also an amount (if any) equal to a rebate of rentals calculated at the rate of 4% per annum on the rentals (excluding VAT) which have not become due;
8.2 If we terminate the hiring, or accept your repudiation of this Agreement, you must pay us: … as compensation or agreed damages on our acceptance of your repudiation, or as a debt on our termination, the total amount of rentals payable during the Hiring Period (excluding VAT) less the amount of rentals paid or which have become due (excluding VAT) less also an amount (if any) equal to a rebate of rentals calculated at the rate of 4% per annum on the rentals (excluding VAT) which have not become due;
essayer said:
This is from our old VW lease agreement if it helps
If I’m reading that right, does that effectively mean you are liable for 96% of the outstanding period of the lease? That seems incredibly harsh, but would seem to justify the huge sum now sought!VWFS said:
5.3 If the Vehicle is lost, damaged or destroyed so as to become an actual , arranged or constructive total loss you must pay us, when we ask, such sum as will equal the amount calculated in accordance with Term 8.2.
8.2 If we terminate the hiring, or accept your repudiation of this Agreement, you must pay us: … as compensation or agreed damages on our acceptance of your repudiation, or as a debt on our termination, the total amount of rentals payable during the Hiring Period (excluding VAT) less the amount of rentals paid or which have become due (excluding VAT) less also an amount (if any) equal to a rebate of rentals calculated at the rate of 4% per annum on the rentals (excluding VAT) which have not become due;
8.2 If we terminate the hiring, or accept your repudiation of this Agreement, you must pay us: … as compensation or agreed damages on our acceptance of your repudiation, or as a debt on our termination, the total amount of rentals payable during the Hiring Period (excluding VAT) less the amount of rentals paid or which have become due (excluding VAT) less also an amount (if any) equal to a rebate of rentals calculated at the rate of 4% per annum on the rentals (excluding VAT) which have not become due;
I never take gap insurance normally, but would be very tempted too on those terms!
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