PCP vs HP finance car damage

[livewire08]

Hi all,

If you damage a car thats under a PCP or HP finance contract, is there any difference in your obligation to get the damage repaired? Under both contracts the car is still owned by the dealer until you make the final payment so i would guess not? I have reservations about going down the finance route purely for the reason that the car isn't yours and would be very conscious of that. But for some reason i thought HP would be better because you're buying to own rather than potentially give back..

Thanks

[750turbo]

livewire08 said:

Hi all,

If you damage a car thats under a PCP or HP finance contract, is there any difference in your obligation to get the damage repaired? Under both contracts the car is still owned by the dealer until you make the final payment so i would guess not? I have reservations about going down the finance route purely for the reason that the car isn't yours and would be very conscious of that. But for some reason i thought HP would be better because you're buying to own rather than potentially give back..

Thanks

The dealer does not own the car though - The Finance Company does.

PCP - "If" the car is returned, then there will be a clause ref the condition of the vehicle.

HP - The car will be yours, Finance Co will ONLY be interested in getting paid.

Happy to be corrected though.

[livewire08]

Ok thanks, do you know if you write-off a vehicle, this should be covered by insurance and so the finance company would be paid out of that? Does insurance normally cover the full value of the vehicle? Sorry probably veering off topic here. The finance company wants all the money back basically whether its written off or not. This is all worse case scenario stuff but its something i have to consider.

[750turbo]

You can purchase "GAP" insurance that will cover the difference between what the Finance Co are owed, and the amount paid by Insurance. (Google it)

I believe there are various types though, hopefully someone with far more knowledge may drop by.

[valiant]

Google GAP insurance.

Some people swear it's necessary, others a waste of money but in a nutshell it will pay out the difference between what the insurance co pay out and the balance on the finance. There are other types like Return To Invoice which will pay out the difference between the insurance payout and the original invoice price.

It's worth bearing in mind that most insurance companies will pay out for a new car (providing it's a new car you're buying) if written off in the first year so GAP may only be necessary for the remaining finance term but generally you have to buy the policy within 6 months of purchasing the car.

It's fairly cheap anyway and there's even a discount code in a sticky thread in the GG sub-forum, but do not buy direct from the dealer as you'll end up paying well over the odds for the cover.

Arrrgh too slow, you wait ten hours for a reply and then two come along at once. Damn you all!!!!

Edited by valiant on Sunday 31st May 18:13

[livewire08]

Ah thats interesting, i didn't know such a thing as GAP insurance existed! cheers