Crashed lease car, Help!
Discussion
richard-8zwx3 said:
Car less than a year old: certain insurers will give value of new one in case of write off. Direct Line for one.
Not usually for leased vehicles.OP, you repair the vehicle, presumably through insurance. If it’s a write off your insurance company will deal with the lease company (it’s their car, not yours, you don’t have an insurance interest in it).
If it’s written off it depends on your lease company what happens next - they might offer you a replacement or they might just end the lease.
skeeterm5 said:
soupdragon1 said:
Eh? That's a link explaining gap, I know what it is.
It also tells you about the liability rests with the leaseholder in the event the write off value is less than the outstanding finance.Let's keep it really simple. Find some proof. In the PH lease thread, now at volume 6, not one example of the consumer having to pay any gap.
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
How about if your insurance policy insisted that they would deal with me on your behalf?Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." The same as some insurance companies insist on dealing with the lease companies on the insured/lessee's behalf.
soupdragon1 said:
No it doesn't!
Let's keep it really simple. Find some proof. In the PH lease thread, now at volume 6, not one example of the consumer having to pay any gap.
I don’t think there is an instance that I can recall and I have frequented that one since volume 2 and between me and the wife had about 5 lease vehicles over the last 6 or 7 years - most;y thanks to some great deals posted. Let's keep it really simple. Find some proof. In the PH lease thread, now at volume 6, not one example of the consumer having to pay any gap.
I do have some experience here though as we had a Golf 7.5 GTI which was stolen in December 2017. We got the vehicle 2nd September 2017. So not even 3 Months in to a 2 year lease.
VWFS did deal with the insurer, direct line, directly and they provided a cost of the vehicle but kept me in the loop with everything. The cost was something like £22,000 net of VAT, there was reference to the fact that it was the price they needed and if there was a shortfall from the insurer then it would likely be mine to find. Anyway direct line paid it minus my excess without any questions so no issues and I would expect most if not all insurers are going to be on the same page as the lease companies when it comes to values of vehicles <3 years old.
There was also the matter of the outstanding finance that I owed or as they put it the termination fee, which due to the short amount of time we had it stood at around £2,500. This would have been a calculation based in the remaining rentals as I was in effect terminating the agreement. There was no option of a replacement vehicle from either DL or VWFS and to be honest the circumstances in which the vehicle was stolen I doubt my wife would have wanted another GTI if they paid her. I may have been lucky or this may be common but they wrote us a nice letter to say that due to the circumstances and stress caused and the fact that they had received payment in a timely manner they were waiving the termination fees. Nice touch to be honest, direct line even paid me my initial payment of £660 that I had paid to VWFS so I was literally left in the same position before I started. As I have said I may have struck lucky or it may be common place and why we don’t hear of people have big bills to pay. GAP insurance would also have covered much of this if the right cover was taken (which I did not), and removed much of the stress also as it was not until the end that it became clear that I would not be thousands out of pocket.
Had it been a fault accident and the vehicle was written off maybe they would not have been so favourable but as far as the difference betweeen the lease companies valuation and the insurers I would be surprised if there was any shortfall to be made up by the person taking the lease.
talksthetorque said:
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "fk off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
How about if your insurance policy insisted that they would deal with me on your behalf?Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." The same as some insurance companies insist on dealing with the lease companies on the insured/lessee's behalf.
TwigtheWonderkid said:
talksthetorque said:
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "fk off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
How about if your insurance policy insisted that they would deal with me on your behalf?Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." The same as some insurance companies insist on dealing with the lease companies on the insured/lessee's behalf.
Indeed. But if the market value was less that your agreement with me, that would be between me and you to resolve. You wouldn't be impressed if I just walked away saying "argue with my insurers". I borrowed your car, and entered into an agreement with you.
You wouldn't be able to walk away. I would be able to claim off you and cite our contract. Through the courts if necessary.
It's best you just pay up now tbh - pm me and I'll let you know where to send the money
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "fk off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
I appreciate that you work in the insurance industry so asking this in the spirit of educating myself rather than questioning what you say:Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." Assuming that the car is written off, would the leasing company have a 3rd party claim against the OP for the damage he caused to their car and would the insurance company then be obliged to meet that claim?
I thought there was a consideration for the cost of lease that would have been due?
I think the OP mentions 10K above.
Always thought insurer sorts the car value, leaser is still to pay remaining balance or equivalent early termination fee.
ALA who are recommended on here offer a product specifically for that, Contract Hire plus GAP.
Contract Hire GAP Insurance will, in the event of a total loss claim (accident, theft, fire or flood damage),
cover up to 100% of the outstanding rental payments for the vehicle and cover any shortfall in the market value settlement provided by the insurer.
I think the OP mentions 10K above.
Always thought insurer sorts the car value, leaser is still to pay remaining balance or equivalent early termination fee.
ALA who are recommended on here offer a product specifically for that, Contract Hire plus GAP.
Contract Hire GAP Insurance will, in the event of a total loss claim (accident, theft, fire or flood damage),
cover up to 100% of the outstanding rental payments for the vehicle and cover any shortfall in the market value settlement provided by the insurer.
Wooda80 said:
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "fk off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
I appreciate that you work in the insurance industry so asking this in the spirit of educating myself rather than questioning what you say:Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." Assuming that the car is written off, would the leasing company have a 3rd party claim against the OP for the damage he caused to their car and would the insurance company then be obliged to meet that claim?
What we are talking about here are 2 entirely separate contracts. The lease firm has a contract with driver whereby he is liable for £x if the car is written off. The driver has a contract with his insurer whereby they are liable for £y is the car is written off. y=market value.
There is nothing in the driver's contract with his insurer that says "the insurer will pay more than £y in the event of the policyholder entering into a separate contract with the owner agreeing to pay them more than £y.
It would be good if that weren't the case. I could borrow my brother's car, agree to pay him £1m if it's written off, I'd insure it, write it off, the insurer would say "it's worth £500", I'd produce my agreement with my brother, they'd pay him a million, and when it was all concluded, we'd split the profit!
Edited by TwigtheWonderkid on Thursday 30th August 10:19
TwigtheWonderkid said:
Wooda80 said:
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "fk off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
I appreciate that you work in the insurance industry so asking this in the spirit of educating myself rather than questioning what you say:Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." Assuming that the car is written off, would the leasing company have a 3rd party claim against the OP for the damage he caused to their car and would the insurance company then be obliged to meet that claim?
What we are talking about here are 2 entirely separate contracts. The lease firm has a contract with driver whereby he is liable for £x if the car is written off. The driver has a contract with his insurer whereby they are liable for £y is the car is written off. y=market value.
There is nothing in the driver's contract with his insurer that says "the insurer will pay more than £y in the event of the policyholder entering into a separate contract with the owner agreeing to pay them more than £y.
And a general point in terms of the remaining lease monthlies.....
Unless the lease company provides you with another car, they are in breach of contract. So why would anyone have to pay remaining monthlies if the lease company don't give you another car? The insurer will pay lease Co. for the written off/stolen one so if the lease Co don't give you a replacement - how on earth can they come looking for monthly payments for a car they haven't given you?
People are buying GAP due to fear and/or lack of understanding.
We have 2 cars in our household. A lease car (no GAP) and a bought outright car (with GAP)
The reason we bought the GAP insurance for the owned car was due to it being one of the most stolen car types in the UK. We took a 4 year policy and if they car is written off or stolen, we get back the full amount that we paid the day we bought it - not the residual value. That's an example of what GAP is 'really' for.
I'll say this again - can anyone find an example of anyone in the UK that has (a) had a residual GAP value to pay in the event of a lease car being a total loss or (b) had to self fund any remaining monthlies either in full or in part?
VWFS agreement says:
However, I don’t see any provision that makes the leasee responsible for any shortfall in any insurance payout - it just says “If we do not receive the money payable under your insurance policy on a total loss claim, you must pay us, when we ask, an amount equal to the value” which makes me think they will simply negotiate the value with the insurance company - they probably use similar methods to value the vehicle anyway?
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 ... 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 ..
They may waive as a goodwill gesture, but I’d be wary of relying on it; recall a thread on here where the leasee died and VWFS took back the car and charged the estate for the fees.8.2 ... 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 ..
However, I don’t see any provision that makes the leasee responsible for any shortfall in any insurance payout - it just says “If we do not receive the money payable under your insurance policy on a total loss claim, you must pay us, when we ask, an amount equal to the value” which makes me think they will simply negotiate the value with the insurance company - they probably use similar methods to value the vehicle anyway?
Rick101 said:
I thought there was a consideration for the cost of lease that would have been due?
I think the OP mentions 10K above.
Always thought insurer sorts the car value, leaser is still to pay remaining balance or equivalent early termination fee.
ALA who are recommended on here offer a product specifically for that, Contract Hire plus GAP.
Contract Hire GAP Insurance will, in the event of a total loss claim (accident, theft, fire or flood damage),
cover up to 100% of the outstanding rental payments for the vehicle and cover any shortfall in the market value settlement provided by the insurer.
I think maybe some people are getting confused with contract hire and PCP. The discussion here is leasing/contract hire. PCP is a different story and maybe that's where some of the confusion is generated.I think the OP mentions 10K above.
Always thought insurer sorts the car value, leaser is still to pay remaining balance or equivalent early termination fee.
ALA who are recommended on here offer a product specifically for that, Contract Hire plus GAP.
Contract Hire GAP Insurance will, in the event of a total loss claim (accident, theft, fire or flood damage),
cover up to 100% of the outstanding rental payments for the vehicle and cover any shortfall in the market value settlement provided by the insurer.
For companies like ALA. They can insure you on whatever they like. For example - they might offer a customer insurance for £100 a year that means, if the earth stops rotating on its axis, they will pay out £100,000. People can go ahead and insure themselves for that sort of outcome if they want to, but it doesn't mean its possible that it will actually happen.
Eg, Ala say they will cover you for outstanding rental payments when the reality is, the lease Co can't actually bill you for rental payments if they aren't supplying you with a car!
soupdragon1 said:
TwigtheWonderkid said:
Wooda80 said:
TwigtheWonderkid said:
He hasn't bought a car, he's rented it.
Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "fk off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k."
I appreciate that you work in the insurance industry so asking this in the spirit of educating myself rather than questioning what you say:Suppose I borrowed your car, and told you I'd insure it. Then I wrote it off. Your written agreement with me values the car at £2000. My insurer values the car at £1500.
If I said to you "It's between you and my insurer, sort it out", I'm sure you'd say "f
k off. We had an agreement, and I want £2K. You sort it out with your insurer, it's none of my concern, just get me my £2k." Assuming that the car is written off, would the leasing company have a 3rd party claim against the OP for the damage he caused to their car and would the insurance company then be obliged to meet that claim?
What we are talking about here are 2 entirely separate contracts. The lease firm has a contract with driver whereby he is liable for £x if the car is written off. The driver has a contract with his insurer whereby they are liable for £y is the car is written off. y=market value.
There is nothing in the driver's contract with his insurer that says "the insurer will pay more than £y in the event of the policyholder entering into a separate contract with the owner agreeing to pay them more than £y.
I'm sure that normally, the lease co are happy to accept insurers market value, especially if the driver is leasing another car to replace the written off one. But don't confuse this normal state of affairs with the law.
TwigtheWonderkid said:
There is nothing in law to say that at a given point in a lease agreement, when the car is written off, the amount owning to the lease company cannot exceed market value. The lease company are quite entitled to build in loss of profit, admin fees, or anything else. If you sign that agreement, making yourself liable for a sum in excess of market value, that's got nothing to do with your insurance company. They are insuring you against car accidents, not against entering into bad deals.
I'm sure that normally, the lease co are happy to accept insurers market value, especially if the driver is leasing another car to replace the written off one. But don't confuse this normal state of affairs with the law.
In my lease (Lex Autolease) its £150 admin fee. So I'm not going to take out £120 GAP insurance to cover the very small risk that I have to pay £150 in the event of a write off.I'm sure that normally, the lease co are happy to accept insurers market value, especially if the driver is leasing another car to replace the written off one. But don't confuse this normal state of affairs with the law.
It also states that they expect to receive from the insurer, the net value of the car, minus depreciation and that I must have the car covered by fully comp insurance and if I do anything that voids my insurance, I am liable for that value, not the insurer. (eg, If I took it track racing, became a taxi driver etc)
On the monthlies, it states that the monthlies are to be paid by me until such times as the insurance company settle with them. Any paid monthlies in advance will be refunded pro rata from the date the insurance company pay them for the loss. On the same date, the contract is officially terminated.
And while yes, there is nothing in law specifically relating to car lease instances we are discussing, there are numerous laws in place for 'fair and reasonable' financial practices.
Lex autolease might one day put in the T's & C's that if a car is written off, they expect the full retail value to be paid by the insurer, no matter how old the car is. Just because they have it as a term and condition, doesn't mean they can actually apply that condition, if its not deemed fair and reasonable. Like any financial agreement, any unusual terms and conditions which could potentially cause the consumer financial hardship need to be highlighted as a key concern when signing up, not hidden in the small print.
soupdragon1 said:
In my lease (Lex Autolease) its £150 admin fee. So I'm not going to take out £120 GAP insurance to cover the very small risk that I have to pay £150 in the event of a write off.
So you are liable for more than your insurance will pay. So you are agreeing with me. soupdragon1 said:
not hidden in the small print.
There rarely is any small print. Just normal sized print people can't be bothered to read. Which they then call small print to excuse their tardiness. TwigtheWonderkid said:
soupdragon1 said:
In my lease (Lex Autolease) its £150 admin fee. So I'm not going to take out £120 GAP insurance to cover the very small risk that I have to pay £150 in the event of a write off.
So you are liable for more than your insurance will pay. So you are agreeing with me. soupdragon1 said:
not hidden in the small print.
There rarely is any small print. Just normal sized print people can't be bothered to read. Which they then call small print to excuse their tardiness. The insurance company is a business dealing with the Lease company as a business so the consumer contract is irrelevant.
When the insurance company may state the Market Value is Y, The lease company has to prove "losses" over this to enforce a further claim.
The leaseco can't prove the VAT as a loss - as they just reclaim that against their VAT bill ( or don't pay it, whichever way you look at it) so there's 20% discount.
They also got the car at whopping discount in the first place -No idea what that would be for fleets but I imagine it's over 20% ( ex vat) so they can't claim for that.
Finally they can't claim their eventual profit when they sell - as a loss of profit isn't a claimable loss.
Given all these circumstances - even when the car is delivered it only owes them 60% of list, any leaseco will have a bit of bother claiming anything extra.
When the insurance company may state the Market Value is Y, The lease company has to prove "losses" over this to enforce a further claim.
The leaseco can't prove the VAT as a loss - as they just reclaim that against their VAT bill ( or don't pay it, whichever way you look at it) so there's 20% discount.
They also got the car at whopping discount in the first place -No idea what that would be for fleets but I imagine it's over 20% ( ex vat) so they can't claim for that.
Finally they can't claim their eventual profit when they sell - as a loss of profit isn't a claimable loss.
Given all these circumstances - even when the car is delivered it only owes them 60% of list, any leaseco will have a bit of bother claiming anything extra.
Thanks for all you replies everyone, didn’t expect so many. Hearing what everyone’s got to say is mixed but I’m feeling a little more optimistic, I mean what is the point in Insurance if it’s not doing it’s job fully. I already pay thousands in insurance every year yet hear I am potentially having to do my insurances job.
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