Write off with PCP

[craig1912]

My son has written off his car two months before end of PCP.

Insurance company are phoning with offer tomorrow. Looking online a replacement would cost him £35k ish. His balloon payment at beginning of March is £30k.

I’m not sure how it works but presumably if they offer £35k he can then pay the finance company and keep the balance?

I assume the insurance company don’t need to know the balloon payment and he should try and get as near to a replacement price as he can?

Any advice or help would be appreciated.

[essexd]

The insurance company may try to deal directly with the finance company, is your son the registered keeper for the car?

[craig1912]

essexd said:

The insurance company may try to deal directly with the finance company, is your son the registered keeper for the car?

Registered keeper..yes. As far as I know they don’t know the name of the finance company

[Sheepshanks]

craig1912 said:

As far as I know they don’t know the name of the finance company

They look it up using HPI.

Now again you hear of one falling through the cracks and the full amount being piad out, but it's not supposed to happen like that.

He should have declared to the insurance company when he took out the policy that he doesn't own the car, but a lot of people don't realise the car belongs to the finance company.

[rfn]

Does he have GAP insurance?

[craig1912]

rfn said:

Does he have GAP insurance?

Think so but struggling to find policy!

[craig1912]

Sheepshanks said:

They look it up using HPI.

Now again you hear of one falling through the cracks and the full amount being piad out, but it's not supposed to happen like that.

He should have declared to the insurance company when he took out the policy that he doesn't own the car, but a lot of people don't realise the car belongs to the finance company.

He probably did declare it to be fair. He did put a sizeable deposit on it so should have some equity in it

[The Rotrex Kid]

craig1912 said:

rfn said:

Does he have GAP insurance?

Think so but struggling to find policy!

Did you buy the GAP From the dealer? They can assist with finding it.

Be amazing if he does, get the insurance payout and the GAP and be in a decent position (if RTI GAP)

[craig1912]

The Rotrex Kid said:

Did you buy the GAP From the dealer? They can assist with finding it.

Be amazing if he does, get the insurance payout and the GAP and be in a decent position (if RTI GAP)

If he has Gap it will be ALA as I told him not to buy from dealer

[The Rotrex Kid]

craig1912 said:

The Rotrex Kid said:

Did you buy the GAP From the dealer? They can assist with finding it.

Be amazing if he does, get the insurance payout and the GAP and be in a decent position (if RTI GAP)

If he has Gap it will be ALA as I told him not to buy from dealer

Best speak to ALA and get it sorted then!

[Mr_J]

Sheepshanks said:

He did put a sizeable deposit on it so should have some equity in it

A sizeable deposit will simply have reduced his monthly payment, it will not generate equity

[The Rotrex Kid]

Mr_J said:

Sheepshanks said:

He did put a sizeable deposit on it so should have some equity in it

A sizeable deposit will simply have reduced his monthly payment, it will not generate equity

I missed this. He’s right.

Deposit means Jack at the end, the OFP vs trade value will be the only thing that means anything for the equity

Of course, if he has got RTI then it’s a moot point.

[craig1912]

OK thanks for the replies. I guess worse case is they will cover balloon payment (with luck) as that appears to be under the secondhand value so he will be in no worse position.

[Sheepshanks]

Mr_J said:

Sheepshanks said:

He did put a sizeable deposit on it so should have some equity in it

A sizeable deposit will simply have reduced his monthly payment, it will not generate equity

They're not my words!

[fourstardan]

Isn't GAP the first 2 years on a policy? Been a while since I rented a car

[Gio G]

fourstardan said:

Isn't GAP the first 2 years on a policy? Been a while since I rented a car

Usually it is the duration of the finance agreement itself. If your son has PCP, he should be the registered owner, it is with lease deals that the finance company own the car. If he has GAP, with RTI - return to invoice, they should be paying the balance between insurer payout and the invoice value. Good luck..

G

[craig1912]

Gio G said:

Usually it is the duration of the finance agreement itself. If your son has PCP, he should be the registered owner, it is with lease deals that the finance company own the car. If he has GAP, with RTI - return to invoice, they should be paying the balance between insurer payout and the invoice value. Good luck..

G

Yes it’s PCP and he is registered owner. Looks like he probably doesn’t have GAP but hopefully they’ll pay at least the balloon payment value.

[craig1912]

Insurers have now asked for copy of the finance agreement and settlement figure. Is it likely he will have to pay the excess given the settlement figure is likely less than a replacement car? Appreciate all the finance company are interested in is getting their money and insurer will pay as little as they can get away with

[The Rotrex Kid]

If the insurance company pay out less than the settlement, then yes, that’s your sons bill to pay.