Question for the PCP boffins

[Brads67]

Ok, car bought on PCP (not mine).

The car will shortly be put off the road for a while and will not be used so is getting sorned.

He has been told that if the car is not insured it will be in breach of the PCP contract and the car can be repossessed (even if payments are kept up, which they will be) They are made aware that the car is not insured apparently .

If they do this, they will keep the car and demand the balance of the minimum balance. Is this correct?

It sounds outrageous to me. If he wanted to travel and store the car, it would appear he is not allowed to.

What are the options.?

Edit, BOFFINS ! lol. Can`t seem to be able to edit the title.

[djc206]

Don’t bother SORNing it? Sell it? Clear the finance and then SORN it?

[pmanson]

Why not keep it insured on a very low milage policy... Seems like the easiest way

[Integroo]

Read the contract...?

[Brads67]

Selling it will not clear the finance and the car is wanted.
Keeping it insured is possibly not an option. And it can`t be insured by anyone else or that seems to be in breach of the PCP contract as well.

Hoping for clarification as to whether this is correct or not.

[Brads67]

Is this normal practice for a PCP ? I`ve no idea hence I`m asking. I don`t have the contract here obviously.

[djc206]

Brads67 said:

Selling it will not clear the finance and the car is wanted.
Keeping it insured is possibly not an option. And it can`t be insured by anyone else or that seems to be in breach of the PCP contract as well.

Hoping for clarification as to whether this is correct or not.

There’s only one way to know and that’s to read the contract. I could tell you what mine says but that doesn’t really help!

[Saleen836]

If it is currently insured is there a penalty for cancelling the policy? How far into the policy is your friend? cancelling could see your friend getting a bill for the remaining balance if paid monthly, how long is a 'short while'? insurance policy small print for cancellation is what needs to be looked at first

[Brads67]

Cancelling the insewerance is not an issue.

The issue is having the car repossessed and being chased for the min balance for putting the car off the road.

Edit, Another scenario would be, what would happen if you had a PCP car and got banned from driving ? The situation would be the same, you would want to keep the car but it appears you couldn`t.

Edited by Brads67 on Sunday 19th August 16:05

[silentbrown]

Perfectly normal and reasonable that insurance continues. What happens if the car is stolen?

Audi PCP said:

4. Insuring the Vehicle
4.1 While this Agreement is in force you must keep the Vehicle comprehensively insured , for its full value. You must give us details of the policy if we ask
you to and you must tell the insurer that we own the Vehicle .

Options are

1. 1 : Keep it taxed and insured
2. 2 : Terminate the PCP, selling the car back (even though you may be in negative equity, at least you're not paying monthlies for an asset your'e not using
3. 3: Pay off the PCP and keep the car. You'll still want to insure it though!

[timbo999]

Why would you not want to insure the car when its sorned? Bizarre idea - what happens if the garage burns down or its stolen... oops someone beat me to it.

[Brads67]

Ok if you were travelling for a year, you may not want to insure it, just sorn it and store it.

What if you were banned ? could you even keep it insured ? Would that mean that any PCP car user would face losing the car if they had a ban ?

[Mandat]

Brads67 said:

Ok if you were travelling for a year, you may not want to insure it, just sorn it and store it.

What if you were banned ? could you even keep it insured ? Would that mean that any PCP car user would face losing the car if they had a ban ?

The issue of insurance is not specific to PCP finance, as the same problem would exist with other forms of finance, such as regular HP or a lease.

[neiljohnson]

You can get insurance for cars not in use, need to insure do this as I’m sure other companies do

[silentbrown]

Brads67 said:

Ok if you were travelling for a year, you may not want to insure it, just sorn it and store it.

Doesn't matter what you "want", it's what you agreed to (remember there's a "C" in PCP).

Nice finance company buys a car and lets you use it for three years ON CONDITION that you look after it properly, insure it, pay them every month.

Sell the car, don't pay monthlies, tax and insurance, go travel for a year, buy newer shinier car on return with money saved.

If you owned the car outright would you be happy not having it insured for fire and theft while you were away for a year? I wouldn't.

[Brads67]

So again, what if you were banned, you would lose the car .?

No outrage and indignation please, I`m only looking for info.

Nice and finance company don`t mix, and they don`t let you use it, you pay them for using it.

But anyhoo, stick to the questions please, am only trying to get some info as I`ve said.

Edited by Brads67 on Sunday 19th August 23:59

[silentbrown]

Brads67 said:

So again, what if you were banned, you would lose the car?

Being banned doesn't mean being uninsured. If your current insurer does terminate your policy I think you're still able to get (expensive) cover elsewhere, even though you can't drive the car during the ban period.

Also AFAIK the insurance for PCP doesn't have to be in your name. So a mate could insure it for you.

If you can't afford to keep it insured, regardless of reason, the finance company are understandably going to want their car back.

[Saleen836]

So how long 'off road' are we talking...3 months? 6? 12?

If longer why not just hand the car back and repay the shortfall as continuing monthly payments are still going to be made anyway, it could possibly be cleared before the off road period then your friend will be up on the deal and could just buy another car when required

[51mes]

neiljohnson said:

You can get insurance for cars not in use, need to insure do this as I’m sure other companies do

Yes - it's called "Laid Up Insurance" - mostly used for classic cars, but ask your insurer, of course if you are int he middle of an insurance year when you are having it stored for 12 months - you end up with 6 months in one policy, 6 months in another - so just take 2 low mileage policies (each with 6 months)...

S.

[Heres Johnny]

Its a PCP - they own the car unless you pay the final bill, if you don't, they taket he car back, they make it a condition that if the car is lost for whatever reason, they get their money irrespective and you promising to pay isn't good enough, and they write this into the contract.

Whoever took out the PCP entered into a contract, whether you or they like it or not, whether they get banned or put in prison or go travelling, the deal is still the deal. Minimum acceptable is probably a 3rd party fire and theft policy while sorn'd, there may be just fire and theft, but only the PCP company can confirm.