HELP please -The Funding Corporation/ACF - car finance -

[Skye]

In 2010 Ibought a car from ACF which was financed through the Funding Corporation.

I was sold GAP insurance by the sales man on the understanding that if anything ever happened to the car I would not be left owing any money.

A year later my car was stolen and I contacted my insurance company, the GAP insurance company and the Funding Corporation.

The Funding Corporation were very explicit in that Iwas not allowed to accept any settlement figure from my insurance company unti lthey had said it was ok. I did this and the insurance company paid the fundsdirect to the Funding Corporation, the GAP insurance company came back with a figure that left me owing just over £1,000 to the finance company.

I complained to them, and advised that I felt that I had been mis-sold the insurance as the salesman had told me that this would cover any gap left on the finance agreement, as a gesture of goodwill they then made a further payment of £510 to the Funding Corporation.

I felt that the Funding Corporation should also havemade a similar offer and cleared the remaining £509 outstanding balance.

To cut a long story short I didn’t pay this amount and now 3 years later I have received a demand for nearly£4,000 which is the original sum due of £509 plusall the interest for the 4 year term of the loan. They have told me that because I didn’t pay the remaining balance off they are entitled to add all the interest back on.

I know I need to pay the £509, I can’t afford to pay it allat once but would be able to pay it off over 6 months but I feel that paying allthe interest due over the 4 year term is a bit harsh, considering that themajority of the loan was redeemed after the first year. I know that I am at fault as I have stuck my head in the sand and ignored them for nearly 3 years.

Could someone please advise me if there is any way I can get out of paying all this interest?

[des8]

Re: HELP please -The Funding Corporation/ACF - car finance -

Hi and welcome.

I don't understand why there was a shortfall in the payment by your GAP insurer.
As you know the policy is designed to pay the difference between the value of the vehicle when it is stolen and the balance owing to the finance company. It is there to avoid the problem of vehicle depreciation.

What explanation did the GAP insurers give for not meeting the full amount?

Were you in arrears with your finance payments?

Do you still have a copy of your GAP policy, or can you tell us the name of the insurer? (this is so we can check the wording)

For whom did the salesman who sold the GAP insurance work?

Who is now demanding the repayment...Funding Corporation or debt collectors.

Is this the first demand for payment, or have you just been ignoring them?

Have you had a breakdown of how the amount now claimed has been calculated?

[labman]

Re: HELP please -The Funding Corporation/ACF - car finance -

The Financial Ombudsman Service have produced an interesting article about this, and the varying types of GAP insurance now available here: http://www.financial-ombudsman.org.u...insurance.html

[Skye]

Re: HELP please -The Funding Corporation/ACF - car finance -

Many thanks for your reply, I still have the paperwork at home. The GAP insurers said that the difference covered was between the market value of the car and not what I paid for the car, I have their reply to my complaint at home and can upload it for you to have a look at if that would be ok?
I wasn't in arrears with my finance payments, I did stop paying when the car was stolen and the insurance companies contacted.
The salesman who sold me the policy worked for the car company selling the car.
The Funding Corporation are demanding the payment, this is the second demand for payment - there would probably have been more but I have moved a couple of times since then and didn't contact them to give them my new address.
I haven't been given a breakdown only a letter advising the amount still owing and the interest they have added back on. At the time I wanted a statement showing the interest rebate but they wouldn't give me one. I don't know how they worked it all out.

I really appreciate your help with this matter
Skye

Hi and welcome.

I don't understand why there was a shortfall in the payment by your GAP insurer.
As you know the policy is designed to pay the difference between the value of the vehicle when it is stolen and the balance owing to the finance company. It is there to avoid the problem of vehicle depreciation.

What explanation did the GAP insurers give for not meeting the full amount?

Were you in arrears with your finance payments?

Do you still have a copy of your GAP policy, or can you tell us the name of the insurer? (this is so we can check the wording)

For whom did the salesman who sold the GAP insurance work?

Who is now demanding the repayment...Funding Corporation or debt collectors.

Is this the first demand for payment, or have you just been ignoring them?

Have you had a breakdown of how the amount now claimed has been calculated?

[labman]

Re: HELP please -The Funding Corporation/ACF - car finance -

It would be useful to see the wording of the policy. If you post it up, please make sure you remove ALL personal information first. It will be the wording in the actual policy which determines the way forward.

[des8]

Re: HELP please -The Funding Corporation/ACF - car finance -

Agree with you Labman, we need the policy.

However I find the insurer's explanation odd as the whole point of GAP insurance is to make up the shortfall caused by the rapid depreciation of cars, i.e. the difference between price paid and market value if & when vehicle stolen or destroyed.
GAP insurance doesn't always cover the whole amount, for example it won't cover the excess of your car insurance as this is regarded as being self insured, but this doesn't seem to be the excuse here.

[labman]

Re: HELP please -The Funding Corporation/ACF - car finance -

It's not an area I know any more than the normal man off the street about Des, except I remembered reading my link previously. The policy should be interesting as my layman's understanding is that GAP insurance does pretty much what it says on the tin. As you say, it appears not to be doin that here, so we need to see the policy to determine why. :beagle:

[Skye]

Re: HELP please -The Funding Corporation/ACF - car finance -

Hi

Many thanks for you replies, I have attached the GAP policy (I think!) and the finance statement but it won't let me attach the response from the GAP Insurers to my complaint, I will try in a new message just in case there is a limit on how much you can upload.

Kind regards
Skye

[des8]

Re: HELP please -The Funding Corporation/ACF - car finance -

I've had a quick look at this and my first impression is The Funding Corporation are out of order.

To me this looks like a non secured personal loan over 4 years, (?)regulated by CCA 1974 for which the lender can charge a 30 day penalty for early redemption. They have just subtracted the insurance payouts from the total without recalculating the interest over the short period.

However I'm not up with loan problems and will leave this for other more knowledgeable members to advise, but if you have a copy of the loan agreement it might be helpful to post it up.

Regarding the insurance side:1) what sort of insurance policy did you have for the vehicle: comprehensive or Third party ,fire & theft?
2) what was the sum insured?
3) how much did that insurance pay out?
4)what year was car first registered?

When you post up, do make sure your name can't be read and remove account reference numbers.
They were visible on your attachments. I have asked those who have the knowledge to amend your postings.
To me it's an arcane ability.

[Skye]

Re: HELP please -The Funding Corporation/ACF - car finance -

Hi Des

Thank you for your reply and sorry for not removing all account references, hopefully I have managed it this time.

The insurance I had was fully comprehensive and I advised them of the amount I was paying for the car at the time.
I have attached a copy of the letters detailing the payment.

Kind regards
Skye

I've had a quick look at this and my first impression is The Funding Corporation are out of order.

To me this looks like a non secured personal loan over 4 years, (?)regulated by CCA 1974 for which the lender can charge a 30 day penalty for early redemption. They have just subtracted the insurance payouts from the total without recalculating the interest over the short period.

However I'm not up with loan problems and will leave this for other more knowledgeable members to advise, but if you have a copy of the loan agreement it might be helpful to post it up.

Regarding the insurance side:1) what sort of insurance policy did you have for the vehicle: comprehensive or Third party ,fire & theft?
2) what was the sum insured?
3) how much did that insurance pay out?
4)what year was car first registered?

When you post up, do make sure your name can't be read and remove account reference numbers.
They were visible on your attachments. I have asked those who have the knowledge to amend your postings.
To me it's an arcane ability.

[biondani]

Re: HELP please -The Funding Corporation/ACF - car finance -

Was this ACF based in West London? I purchased a car in the same way and took the GAP insurance and confirm at no time were was I or my wife told that it would only cover up to book value of the car. In fact the salesman stressed that it would cover ALL outstanding finance on the car. Like yourself we didn't get given a policy at the time to review. I sold my car last year so luckily have never needed to use the policy. All I can remember of the salesman is a very strong south african accent.

[Skye]

Re: HELP please -The Funding Corporation/ACF - car finance -

Hi
No it was in Yorkshire but it sounds like they all went to the same sales school, the salesman that sold me my car was adamant that it would cover all outstanding costs! Glad you managed to sell your car and get out of the situation.

[des8]

Re: HELP please -The Funding Corporation/ACF - car finance -

Thanks for the documents.
I suspect as biondani says that you were never told the policy would exclude "any amount financed above the motor vehicle book value at the time of your purchase".
The policy was sold by the car salesman, so he is unlikely to draw your attention to the fact you are paying over the odds for the car.
However that exclusion will have been hidden in the mass of paper you signed
Did you have anything to do with settling the claim? i.e. did you negotiate with Swiftcover or was it all done by the Direct Group?
The reason for asking is that claim condition requires you to use your best endeavours to obtain full indemnity from Swiftcover.
However Direct Groups letter of 8th July gives the impression that they took over the negotiations.
Now if they were acting on your behalf and did not get full indemnity for you they need to show you why not.
Did they keep you informed of the claim negotiations with Swiftcover?
Did they say how they assessed the value of the vehicle after it had been stolen?
You need to see all their negotiations to make sure they argued fully on your behalf.
I suspect they may have accepted the first figure suggested by Swiftcover and so possibly failed in the duty they owed to you.
With regard to dealing with the Funding Corporation I'll see if I can get one of our credit wizards to look for you.

[Skye]

Re: HELP please -The Funding Corporation/ACF - car finance -

Hi

The salesman did indeed say that the policy would cover all costs, he said that if I drove out of the yard and somthing hit me writing off the car then I would be covered for all amounts owing!
I didn't have anything to do with the settling of the claim as you rightly say it was all done by the Direct Group and I was told that I couldn't accept any settlement that was the right of the Funding Corporation. The pay out was based on Glass's guide and not the amount I paid for the car. Never having been involved in anything like this I didn't know that I had any rights to question the valuation of the car. I still feel I was mis-sold the policy as they told me it would cover any shortfall, they failed to mention that it would not cover the short fall between what I bought the car for and what the Glass guide valued it at.
Thank you for asking for help with the Funding Corporation, I can't see how they can expect me to pay all the outstanding interest surely I should get a rebate for the lump sum paid by the insurance companies, if I have to I will pay the outstanding sum of £509 but I really don't feel I should be forced to pay the interest part.

Regards
Skye

Thanks for the documents.
I suspect as biondani says that you were never told the policy would exclude "any amount financed above the motor vehicle book value at the time of your purchase".
The policy was sold by the car salesman, so he is unlikely to draw your attention to the fact you are paying over the odds for the car.
However that exclusion will have been hidden in the mass of paper you signed
Did you have anything to do with settling the claim? i.e. did you negotiate with Swiftcover or was it all done by the Direct Group?
The reason for asking is that claim condition requires you to use your best endeavours to obtain full indemnity from Swiftcover.
However Direct Groups letter of 8th July gives the impression that they took over the negotiations.
Now if they were acting on your behalf and did not get full indemnity for you they need to show you why not.
Did they keep you informed of the claim negotiations with Swiftcover?
Did they say how they assessed the value of the vehicle after it had been stolen?
You need to see all their negotiations to make sure they argued fully on your behalf.
I suspect they may have accepted the first figure suggested by Swiftcover and so possibly failed in the duty they owed to you.
With regard to dealing with the Funding Corporation I'll see if I can get one of our credit wizards to look for you.

[des8]

Re: HELP please -The Funding Corporation/ACF - car finance -

I cannot see, nor would expect to see,on the Credit Agreement that the Funding Corporation had the right to agree the claim offer from Swiftcover.
Certainly the GAP insurers could with hold their agreement to Swiftcover settlement figure, but that is not the same as giving them authority to settle the claim.
They are inconsistent in their approach: they allow you to pay over Glasses Guide price but only accept Glasses Guide for loss indemnity. The guide is just that ... a guide. Anyone in the trade knows that... car values like houses prices vary from area to area, month to month. If you had settled the claim yourself you probably would not have accepted that figure. You would have challenged it, researched how much it would have cost to replace the car with a similar vehicle and probably pushed the figure up. It is possible you wouldn't have needed that GAP policy.
I believe you were misled by the car salesman when you purchased the policy. It is likely that he didn't realise it as he probably doesn't understand the first thing about insurance.... he's a car salesman.
I also believe the claim wasn't broked properly by the Direct Group. They just wanted a figure from Swiftcover and happily accepted Glasses Guide.
How to rectify those problems now, I'm not sure, as you have signed documents agreeing to it all.

I'd like to see input from others on the credit side before advising further.

I don't think that the Funding Corp. are being fair, but they are probably legally correct. I have flagged this up and hoping others will be along to advise.