Uninsured lease car, crashed
Discussion
My idiot brother in law got drunk and crashed his leased car into two parked cars. His car is reasonably damaged but probably repairable. Lost his licence and is doing some community service as punishment.
Problem is that the car is on PCP, currently on monthlies and then a £14k balloon at the end. Insurance of course aren't covering him, and indeed they may pursue him for the damage to the parked cars too.
My question is, what will the finance company do. He can keep paying the monthlies and then pay the balloon and own a damaged car. But what alternatives are there? He's living month to month and currently is holding down his job to be able to keep paying the monthlies, but he won't be able to afford the balloon.
Difficult to try and sell the car to finance some of the balloon given it has outstanding finance. He could fess up and try and agree a payment plan? Or fix the car and hand it back - although that might be costly and right now difficult to find a shop that will take on the job.
Any and all thoughts much appreciated.
Problem is that the car is on PCP, currently on monthlies and then a £14k balloon at the end. Insurance of course aren't covering him, and indeed they may pursue him for the damage to the parked cars too.
My question is, what will the finance company do. He can keep paying the monthlies and then pay the balloon and own a damaged car. But what alternatives are there? He's living month to month and currently is holding down his job to be able to keep paying the monthlies, but he won't be able to afford the balloon.
Difficult to try and sell the car to finance some of the balloon given it has outstanding finance. He could fess up and try and agree a payment plan? Or fix the car and hand it back - although that might be costly and right now difficult to find a shop that will take on the job.
Any and all thoughts much appreciated.
Sorry for your sister, she's gonna suffer some of this punishment too. Only course of action I can think of is
1. Check paperwork to see if theres a specific clause there to cover this. If not
2. Notify the lease co and see if there's any agreement to be made to buy the car in these circumstances, if not
3. keep paying the regular payments and repair the car asap, get it sold and try to get a settlement figure and get a loan to make up the difference. Car definitely hasn't been written off if it's not insured so should sell without issue if repairs are done well.
1. Check paperwork to see if theres a specific clause there to cover this. If not
2. Notify the lease co and see if there's any agreement to be made to buy the car in these circumstances, if not
3. keep paying the regular payments and repair the car asap, get it sold and try to get a settlement figure and get a loan to make up the difference. Car definitely hasn't been written off if it's not insured so should sell without issue if repairs are done well.
I’m assuming over 50% of total finance cost is still outstanding.
There is a number of costs to compare; 1. settlement figure now less car value as is, 2. settlement figure less car value now after repair plus repair costs and 3. Remaining monthlies plus balloon less car value at end of PCP term plus repair costs. Obviously this will involve guesswork but it may at least steer him to the least costly option overall.
If he wants to wing it and can afford the monthlies, he could get a personal loan to fund the balloon at the end.
Hopefully lack of driving won’t affect his job prospects.
Has the insurance co now cancelled his insurance or is the policy still active? Just thinking about whether the car is being kept on the public road or if SORNd etc.
There is a number of costs to compare; 1. settlement figure now less car value as is, 2. settlement figure less car value now after repair plus repair costs and 3. Remaining monthlies plus balloon less car value at end of PCP term plus repair costs. Obviously this will involve guesswork but it may at least steer him to the least costly option overall.
If he wants to wing it and can afford the monthlies, he could get a personal loan to fund the balloon at the end.
Hopefully lack of driving won’t affect his job prospects.
Has the insurance co now cancelled his insurance or is the policy still active? Just thinking about whether the car is being kept on the public road or if SORNd etc.
Decky_Q said:
3. keep paying the regular payments and repair the car asap, get it sold and try to get a settlement figure and get a loan to make up the difference. Car definitely hasn't been written off if it's not insured so should sell without issue if repairs are done well.
That's probably the route to take. Finance won't care if they get all their money, but they'll probably care if they get a crashed/repaired car back.Robertb said:
Has the insurance co now cancelled his insurance or is the policy still active? Just thinking about whether the car is being kept on the public road or if SORNd etc.
This is an important point - if the car's no longer insured, then he's probably breached his finance agreement anyway.Just a quick note to clear up & has been kind of mentioned above.
You mention Lease, but also PCP & Balloon. If the agreement has a Balloon payment, then it's NOT a Lease it's a Purchase agreement & they differ significantly.
As someone already mentioned, if your SiL has to date paid over 50% of the total agreement payment amount (that's deposit & monthlies paid to date), then he's entitled to return the vehicle to the finance company, but the expected condition of the vehicle will be relevant to fair wear & tear for the age & mileage, so the accident damage would need repairing.
You mention Lease, but also PCP & Balloon. If the agreement has a Balloon payment, then it's NOT a Lease it's a Purchase agreement & they differ significantly.
As someone already mentioned, if your SiL has to date paid over 50% of the total agreement payment amount (that's deposit & monthlies paid to date), then he's entitled to return the vehicle to the finance company, but the expected condition of the vehicle will be relevant to fair wear & tear for the age & mileage, so the accident damage would need repairing.
Decky_Q said:
Sorry for your sister, she's gonna suffer some of this punishment too. Only course of action I can think of is
1. Check paperwork to see if theres a specific clause there to cover this. If not
2. Notify the lease co and see if there's any agreement to be made to buy the car in these circumstances, if not
3. keep paying the regular payments and repair the car asap, get it sold and try to get a settlement figure and get a loan to make up the difference. Car definitely hasn't been written off if it's not insured so should sell without issue if repairs are done well.
The problem with number 3 is the car isn’t his to sell until the finance has been settled. The finance will show up on a vehicle check, nobody with any sense is going to buy a car without standing finance, because it does not belong to the person selling it.1. Check paperwork to see if theres a specific clause there to cover this. If not
2. Notify the lease co and see if there's any agreement to be made to buy the car in these circumstances, if not
3. keep paying the regular payments and repair the car asap, get it sold and try to get a settlement figure and get a loan to make up the difference. Car definitely hasn't been written off if it's not insured so should sell without issue if repairs are done well.
There is the scenario where the insurance company does come after him for the third party costs. But if there is a possibility that he gets declared bankrupt, that might change the course of action.
That would need proper professional advice I imagine. Might be CAB, might be beyond their capabilities. Worth keeping in mind
That would need proper professional advice I imagine. Might be CAB, might be beyond their capabilities. Worth keeping in mind
vaud said:
Point him towards Citizens Advice.
Keep it to that so that any other advice, if it goes awry, doesn't come back to you.
Not taking the moral high ground, but might be easier if you point him in the direction of advice rather than give him advice?
Yes do this. A world of pain and blame comes the OP's way when his well meaning advice gleaned from PH experts does not result in a glorious and painless outcome for the offender. Arms length, all the way, unless you are qualified to advise.Keep it to that so that any other advice, if it goes awry, doesn't come back to you.
Not taking the moral high ground, but might be easier if you point him in the direction of advice rather than give him advice?
w8pmc said:
As someone already mentioned, if your SiL has to date paid over 50% of the total agreement payment amount (that's deposit & monthlies paid to date), then he's entitled to return the vehicle to the finance company, but the expected condition of the vehicle will be relevant to fair wear & tear for the age & mileage, so the accident damage would need repairing.
This is true, but the way these deals are structured unless you have put down a sizeable deposit you tend to only get to the 50% near the end of the agreement. It's called Voluntary Termination.Gassing Station | General Gassing | Top of Page | What's New | My Stuff