Car finance (pcp)
Discussion
Hello people just a quick one to see if anyone has been through anything similar.
Someone went into my parked empty car, the insurance decided to have it written off absolutely gutted but that's life.
However they valued it far lower than what it was worth pre accident and when I disputed it I was put straight to the complaints department and told that because I have pcp finance I fall into the section of the policy that states if I have a car on lease or contract hire I'm not entitled to the market value just what's left to pay on the finance.
Over the last couple of weeks I have been researching it it and from what I gather pcp is not a lease or contract hire.
Has anyone else run into something similar.
Someone went into my parked empty car, the insurance decided to have it written off absolutely gutted but that's life.
However they valued it far lower than what it was worth pre accident and when I disputed it I was put straight to the complaints department and told that because I have pcp finance I fall into the section of the policy that states if I have a car on lease or contract hire I'm not entitled to the market value just what's left to pay on the finance.
Over the last couple of weeks I have been researching it it and from what I gather pcp is not a lease or contract hire.
Has anyone else run into something similar.
WayOutWest said:
You seem to be missing the factor of the balloon payment required to own the vehicle outright at the end of contract.
You obviously haven't paid the balloon payment yet, so why would the insurance company pay you the full value of the vehicle?
I don't agree, they should be paying out market value pre accident regardless on how the car is financed or paid for. Are they going to pay over market value if your in negative equity? no of course their not. You obviously haven't paid the balloon payment yet, so why would the insurance company pay you the full value of the vehicle?
Same if your coming towards the end of a PCP and have positive equity they should still pay market value, finance gets paid off and you pocket the rest.
OP which insurance company is this?
WayOutWest said:
You seem to be missing the factor of the balloon payment required to own the vehicle outright at the end of contract.
You obviously haven't paid the balloon payment yet, so why would the insurance company pay you the full value of the vehicle?
So how is the OP supposed to pay the balloon since the GFV (if any) won't apply to the mangled wreck? The balloon is after all part of what is outstanding on the finance.You obviously haven't paid the balloon payment yet, so why would the insurance company pay you the full value of the vehicle?
I understand what you are saying about people having cars written off to pocket the money but that applies to all car insurance not just if you are on pcp.
I took out pcp as a means to buy my car I've paid off over £7000 and are now being told I'm not entitled to a market value as they consider it to be leasing/ contract hire.
My finance agreement says absolutely nothing about it being a lease or contract hire even mu finance company has said my contract is not lease or contract hire plus they only finance the purchase of cars they don't do lease or contract hire.
Also from what I understand if you lease or contract hire the company is in possession of the v5 and the lease/ contract hire company's name is on the v5 also. However I have the v5 and my name is on it as the registered keeper.
The whole situation is so confusing but I thank everyone in advance for all information put forward.
I took out pcp as a means to buy my car I've paid off over £7000 and are now being told I'm not entitled to a market value as they consider it to be leasing/ contract hire.
My finance agreement says absolutely nothing about it being a lease or contract hire even mu finance company has said my contract is not lease or contract hire plus they only finance the purchase of cars they don't do lease or contract hire.
Also from what I understand if you lease or contract hire the company is in possession of the v5 and the lease/ contract hire company's name is on the v5 also. However I have the v5 and my name is on it as the registered keeper.
The whole situation is so confusing but I thank everyone in advance for all information put forward.
Curious case. Not heard of this before
One can only assume that with used prices increasing over the last few years, insurance companies are trying to limit their liability to just the outstanding finance.
After all, insurance is there to put you in the same position as pre-claim, not to better your situation. The OP has achieved the same position pre-claim.
However, whether this can be challenged is the question. It's certainly worth a conversation with the ombudsman I would have thought, being as a PCP clearly isn't leasing or contract hire.
One can only assume that with used prices increasing over the last few years, insurance companies are trying to limit their liability to just the outstanding finance.
After all, insurance is there to put you in the same position as pre-claim, not to better your situation. The OP has achieved the same position pre-claim.
However, whether this can be challenged is the question. It's certainly worth a conversation with the ombudsman I would have thought, being as a PCP clearly isn't leasing or contract hire.
I guess the insurers argument will be the £7000 spent thus far is considered rightly or wrongly, by them at least, to be equivalent to depreciation.
It is odd though the more you think about it. If you owned outright e.g. had bought the car for cash would you get a higher insurance payout?
If so then the insurance premium should be lower for a PCPd car as their liability is less. But did they even know it was PCPd when you insured it?
It is odd though the more you think about it. If you owned outright e.g. had bought the car for cash would you get a higher insurance payout?
If so then the insurance premium should be lower for a PCPd car as their liability is less. But did they even know it was PCPd when you insured it?
DaveA8 said:
They're insuring the OP's loss, if that clears completely the contractual obligation, why would they pay more.
This should be considered a good result
Surely they were insuring their car. To put them back in the same position they need to provide another car of similar value. What if the op was down to the balloon payment and had taken on high monthlies to ensure a small balloon payment at end of term ? Would they only pay out say 5k when car was valued at two or three times that ? Seems like sharp practice to me.This should be considered a good result
I did a quick Google search and can’t find a similar scenario to the OPs. Everything seems to point to paying the market value of the car and then the onus is on the customer/finance provider to settle outstanding balance. Surely if insurance cover only extends to remaining pcp payments, it should be made clear during the application process? I think I’m going to check the terms of my policy now!
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